i:!-,:-;.'!^'!'          BfUanffiffil     ,        ::    fKKMKURHIl  :  UWTOIIHH 


61FT 


GIFT   OF 


: 


SOME  GREAT  COMMODITIES 


SOME    GREAT 
COMMODITIES 


By 


Edith  M./JMiller 
Robert  M.  Mclsaac 
Louis  C.  Taylor 


Beatrice  Bulla 
Anna  M.  Michener 
Esther  G.  Tomkins 


Of  the  Statistical  Division 
National  Bank  of  Commerce  in  New  York 


GARDEN  CITY  NEW  YORK 

DOUBLEDAY,  PAGE  &  COMPANY 

1923 


Add1/ 


COPYRIGHT,  1922,    BY 
DOUBLEDAY,  PAGE  &  COMPANY 

ALL    RIGHTS    RESERVED,    INCLUDING    THAT    OF    TRANSLATION 
INTO  FOREIGN  LANGUAGES,  INCLUDING  THE   SCANDINAVIAN 

PRINTED  IN  THE  UNITED  STATES 

AT 
THE  COUNTRY  LIFE  PRESS,  GARDEN  CITY,  N.  Y. 


NOTE 

This  book  presents  studies  of  ten  great  commodities 
which  occupy  an  important  place  in  the  economic  life  of 
the  United  States  and  in  the  international  trade  of  the 
world.  Originally  appearing  in  Commerce  Monthly,  a 
journal  of  commerce  and  finance  published  by  the  National 
Bank  of  Commerce  in  New  York,  these  studies  occasioned 
so  much  interest  that  they  have  been  made  the  subject 
of  more  elaborate  investigations  which  are  now  presented 
here  in  permanent  form.  Consideration  has  been  given 
to  government  reports  and  recognized  trade  sources  in 
making  the  exhaustive  studies  upon  which  these  articles 
are  based. 


M185569 


CONTENTS 


PAGE 


COAL i 

COTTON 38 

IRON  AND  STEEL 63 

LUMBER 90 

PETROLEUM  AND  PRODUCTS no 

RUBBER 140 

SILK ,     .  160 

SUGAR 185 

WHEAT 213 

WOOL 234 


SOME  GREAT  COMMODITIES 


SOME  GREAT  COMMODITIES 

COAL 

ADEQUATE  coal  supplies  are  of  fundamental  im- 
portance to  every  industrial  country.  The  whole 
structure  of  modern  production  has  been  built  on 
coal  as  a  cheap  source  of  power.  In  spite  of  the  develop- 
ment in  the  use  of  water  power  and  of  petroleum  and  its 
products,  the  position  of  coal  as  the  main  source  of  in- 
dustrial power  is  unchallenged. 

Coal  is  widely  distributed  throughout  the  world  and 
few  countries  are  without  at  least  a  small  supply.  The 
resources  of  the  various  countries,  however,  differ  widely 
in  commercial  value  because  of  variations  in  the  quality 
of  the  coal  and  in  the  degree  of  ease  with  which  it  can  be 
mined  and  marketed.  Fairly  complete  surveys  of  the 
coal  resources  of  Europe  and  of  the  United  States  and 
Canada  have  been  made,  but  as  to  the  remainder  of  the 
world,  knowledge  of  both  the  extent  of  the  fields  and  the 
quality  of  the  coal  is  imperfect. 

So  gradual  is  the  evolution  of  coal  through  all  the  stages 
from  peat  to  graphite  that  it  is  difficult  clearly  to  define 
its  different  grades.  The  United  States  Geological  Sur- 
vey, however,  divides  coal  into  six  classifications,  namely, 
lignite,  sub-bituminous,  bituminous,  semi-bituminous, 
semi-anthracite  and  anthracite.  For  all  practical  purposes 
this  classification  is  simplified  into  three  groups,  anthra- 


2  SOME  GREAT  COMMODITIES 

cite,  bituminous  and  lignite.  The  chief  use  of  anthracite 
is  for  domestic  purposes,  the  smaller  sizes  being  used  for 
steam  coal.  The  great  bulk  of  the  world's  coal  is  bitumi- 
nous or  "soft"  coal.  It  is  the  chief  steam  coal;  it  is  es- 
sential for  coke  manufacture  and  consequently  for  the 
production  of  iron  and  steel,  and  it  is  also  used  widely  as 
a  domestic  fuel.  Lignite  is  commonly  known  as  brown 
coal,  although  all  deposits  are  not  of  this  color.  It  is 
heavy  in  moisture  when  taken  from  the  mines,  the  amount 
of  moisture  generally  ranging  from  30  to  40  per  cent.,  and 
in  consequence  is  of  low  heating  value.  This  extra  weight 
and  inferior  heating  value  make  it  impracticable  to  ship 
lignite  any  great  distance.  When  exposed  to  the  weather 
lignite  dries  and  falls  to  pieces  rapidly,  and  it  is  more  likely 
than  other  coals  to  ignite  spontaneously. 

COAL  RESOURCES  OF  THE  WORLD 

The  world's  known  coal  resources  aggregate  about  7,260 
billion  gross  tons.  Of  this,  69  per  cent,  is  in  North 
America,  17  percent,  is  in  Asia,  n  per  cent,  in  Europe 
and  2  per  cent,  in  Oceania.  Africa  and  South  America 
contain  relatively  unimportant  deposits.  The  latest 
available  figures  for  the  resources  of  the  world  by  countries, 
which  are  shown  below  in  Table  A,  were  compiled  on  the 
initiative  of  the  Twelfth  International  Geological  Congress 
and  were  published  in  1913.  Although  the  data  were 
undoubtedly  for  a  year  or  two  prior  to  that  date,  the  ex- 
haustion of  coal  which  occurs  in  two  or  three  years  is 
relatively  so  small  that  the  estimates  may  be  considered 
approximately  correct  as  of  1913. 

Since  1913  further  deposits  have  been  found  in  western 
Canada,  Russia,  China  and  in  other  countries  but  reliable 


COAL  3 

data  as  to  their  extent  are  not  available.  Explorations 
are  being  carried  on  in  South  America,  Asia,  Africa  and 
Oceania,  and  such  activities  have  been  greatly  stimulated 
by  the  high  price  of  coal  and  the  difficulty  of  obtaining  it 
in  recent  years.  While  definite  data  are  not  yet  available 
as  to  the  results  of  this  recent  work,  it  is  certain  that  many 
valuable  coal  areas  are  as  yet  unknown  or  their  possibilities 
uncalculated. 

The  war  has  occasioned  some  important  changes  in  the 
political  distribution  of  coal  resources.  From  Germany, 
France  has  obtained  the  coal  in  Alsace-Lorraine  and  the 
Saar  Basin — the  former  unconditionally,  the  latter  for  a 
period  of  fifteen  years  with  the  possibility  (subject  to  a 
plebiscite)  of  repurchase  by  Germany  at  the  end  of  that 
period.  The  extensive  coal  field  lying  at  the  juncture  of 
the  former  German,  Austrian  and  Russian  Empires  has 
also  been  redistributed.  Those  parts  lying  within  German 
and  Russian  Poland  and  Austrian  Galicia  have  gone  to 
Poland.  The  remainder  of  the  Austrian  portion  now  lies 
in  Czechoslovakia.  The  ownership  of  the  richest  portion 
of  the  field,  which  lies  in  Upper  Silesia,  is  divided  between 
Germany  and  Poland,  the  bulk  of  the  reserves  being  as- 
signed to  the  latter  country.  The  Austrian  Empire  has 
also  lost  the  deposits  in  Dalmatia,  Bosnia  and  Herze- 
govina to  Jugoslavia. 

The  data  shown  in  Table  A  indicate  the  aggregate  re- 
sources possessed  by  the  respective  countries  prior  to  the 
war.  For  those  countries  (Germany,  Austria  and  Russia) 
the  reserves  of  which  have  been  seriously  diminished  in 
consequence  of  the  war,  resources  are  given  in  detail  to 
facilitate  an  estimate  of  their  changed  position.  Quan- 
tities are  stated  in  millions  of  gross  tons  and  no  allowance 


TABLE  A— COAL  RESOURCES  OF  THE  WORLD 


Country 
Australasia 

Australia 

New  Zealand 

Total 

Austria-Hungary 
Bohemia  and  Silesia  (l) 

Galicia  (2) 

Dalmatia,  Bosnia  and 

Herzegovina  (3) 

Hungary 

Other  districts 

Total... 


Total 


Anthracite  Bituminous 
(millions  of  gross  tons) 


Lignite 


Belgium 

Canada  and  Newfoundland , 

Chile 

China 

Colombia 

Dutch  East  Indies 

France 

Germany 

Soar  (4) 

Upper  Silesia  (6) 

Westphalia  (Ruhr} 

Other  districts 

Total... 


India 

Indo-China 

Japan 

Netherlands 

Persia 

Peru 

Russia,  European 

Dombrova  (6) . . . 

Other  districts.. . 

Total.. . 


Russia,  Asiatic 

Spain 

Spitsbergen 

Union  of  South  Africa. 

United  Kingdom 

United  States  (7) 

Other  countries 

Grand  totalO 


162,928 

649 

130,161 

32,118 

3,333 

897 

2,436 

166,261 

649 

131,058 

34,554 

15,400 

3,422 

11,978 

24,507 

... 

24,507 

... 

3,632 

3,632 

1,690 

111 

1,579 

13,105 

12,406 

699 

58,334 

40,446 

17,888 

10,826 

10,826 

1,215,268 

2,124 

279,673 

933,47i 

3,000 

3,000 

979,864 

381,345 

597,928 

591 

26,574 

26,574 

1,290 

236 

1,054 

17,305 

3,219 

12,480 

1,606 

16,287 

16,287 

163,365 

163,365 

210,193 

210,193 

26,825 

13,655 

13,170 

416^70 

403,500 

13,170 

77,753 

75,192 

2,561 

19,686 

19,686 

7,844 

61 

7,oi7 

766 

4,333 

315 

4,018 

. 

1,829 

1,829 

2,007 

689 

1,318 

2,485 

2,485 

56,672 

37,005 

18,035 

1,632 

59,157 

37,005 

20,520 

1,632 

171,132 

64,991 

106,141 

8,629 

1,609 

6,265 

755 

8,612 

8,612 

55,313 

11,476 

43,837 

186,540 

11,178 

175,362 

3,756,277 

16,686 

1,918,310 

1,821.281 

4,462 

270 

1,984 

2,208 

7,258,966 

486,312 

3,834,976 

2,937,678 

iNow  included  in  Czechoslovakia.  *Now  included  in  Poland.  'Now  included  in  Jugo- 
slavia. *Now  under  French  control.  5 Divided  between  Poland  and  Germany;  about 
86  per  cent,  of  reserves  estimated  as  assigned  to  Poland  and  14  per  cent,  to  Germany. 
•Now  included  in  Poland.  7Revised  on  basis  of  latest  estimates  by  U.  S.  Geological 
Survey  of  original  coal  resources  of  the  United  States,  and  grand  total  revised  correspond- 
ingly. 


COAL  5 

is  made  for  waste  in  mining  or  for  quantities  of  coal  not 
easily  minable. 

COAL  RESOURCES  OF  THE  UNITED  STATES 

More  than  half  of  the  total  coal  resources  of  the  world, 
it  will  be  observed  from  Table  A,  are  located  in  the  United 
States.  The  long  lead  as  regards  quantity  which  its  coal 
deposits  hold  over  those  of  other  countries  is  best  illus- 
trated by  the  fact  that  while  they  constitute  52  per  cent, 
of  world  resources,  Canadian  deposits,  which  rank  next 
in  size,  are  only  17  per  cent,  of  the  world  total.  Reserves 
of  the  United  States  at  the  beginning  of  1919  are  estimated 
at  3,752,044  million  tons.  While  of  the  total  available 
supply  nearly  one-half  is  lignite,  this  unfavorable  factor 
is  offset  by  the  wealth  of  bituminous  coal,  so  essential  to 
industrial  development.  Reserves  of  bituminous  in  the 
United  States  constitute  slightly  more  than  half  of  the 
world's  total  of  this  class.  Reserves  of  anthracite  in  the 
United  States,  on  the  other  hand,  are  smaller  than  those 
of  China,  European  Russia  or  Indo-China. 

Considered  from  the  standpoint  of  quantity  only,  the 
western  part  of  the  United  States  contains  far  greater 
coal  reserves  than  the  eastern  section  of  the  country. 
The  United  States  Geological  Survey  divides  the  coal- 
bearing  areas  of  the  United  States  into  six  main  provinces. 
The  total  coal  deposits  of  the  three  western  areas  desig- 
nated as  the  Northern  Great  Plains,  Rocky  Mountain  and 
Pacific  Coast  provinces,  far  exceed  the  amount  of  coal  in 
the  two  eastern  provinces.  However,  it  is  in  the  eastern 
and  interior  provinces,  with  their  relatively  limited  sup- 
plies, that  the  real  wealth  of  coal  lies.  With  the  exception 
of  a  very  small  amount,  all  of  the  anthracite  is  in  the  East, 


6  SOME  GREAT  COMMODITIES 

and,  what  is  far  more  important,  the  best  steaming  coal 
is  confined  to  these  two  eastern  provinces. 

It  is  these  valuable  coals  which  are  being  exhausted 
most  rapidly.  In  the  two  eastern  provinces  the  exhaus- 
tion of  coal  to  the  end  of  1918  is  estimated  at  approxi- 
mately 13,828  million  tons  compared  with  1,457  million 
tons  for  all  the  rest  of  the  country.  Table  B,  based  on 
the  most  recent  estimates  of  the  United  States  Geological 
Survey,  shows  the  original  coal  resources  of  the  United 
States  and  resources  at  the  beginning  of  1919. 

RESOURCES  OF  OTHER  COUNTRIES 

While  Canada  ranks  second  in  aggregate  coal  resources,, 
the  bulk  of  its  deposits  consists  of  lignite,  which  is  of 
secondary  commercial  importance.  Even  so,  its  bitumi- 
nous reserves  rank  fourth  in  extent.  China  possesses 
unsurpassed  stores  of  anthracite,  while  its  bituminous 
reserves  are  second  only  to  those  of  the  United  States. 
Exploitation  of  Chinese  resources,  however,  has  as  yet 
scarcely  begun  and  they  constitute  the  great  reserves  of 
the  more  distant  future.  Asiatic  Russia  likewise  has  ex- 
tensive but  almost  unknown  deposits.  In  Australia  are 
rich  supplies  capable  of  extensive  development.  The 
major  coal  resources  of  Europe  are  comprised  in  four  great 
fields,  the  political  control  of  which  is  divided  among  a 
number  of  powers.  These  coal  fields  are — first,  the  fields 
in  the  British  Isles;  second,  the  Rhine  Valley  fields  in- 
cluding the  Ruhr  Basin  in  Germany,  the  Saar  Basin, 
formerly  German  and  now  under  French  control,  the 
Namur  fields  in  Belgium  and  the  fields  in  the  Nord  and 
Pas  de  Calais  Departments  of  France;  third,  the  fields  at 
the  juncture  of  Germany,  Poland  and  Czechoslovakia, 


COAL 


TABLE  B— ESTIMATED  ORIGINAL  COAL  RESOURCES  OF  THE  UNITED 
STATES;  AND  RESOURCES  AT  BEGINNING  OF  19191 


Province 


Eastern — Penn.  and 

the    Atl.    Coast 

and    Appal,    re- 
gions, inc.  Ohio, 

W.  Va.,  eastern 

Ky.  and  parts  of 

Ala.  and  Tenn.  . .     18,795 
Interior  —  Mich., 

111.,  Ind.,  western 

Ky.,  Iowa,  Kan., 

Okla.,  Mo.,  Ark. 

and  southwest. . .         357 
Gulf  —  Mined  only 

in      Tex.,      but 

found      as      far 

north   as   Cairo, 

111.,  and  east  to 

Ala 

Northern          Great 

Plains  —  From 

N.     Dak.     and 

Mont.,  south  to 

New   Mex.,  inc., 

the  Denver  and 

Raton  Mesa  re- 
gions   

Rocky  Mountains — 

Bighorn,  Wind 

River,    Ham's 

Fork,    Green 

River,  Uinta, 

southwest    Utah 

and  San  Juan 

regions 448 

Pacific         Coast — 

Coals  in  extreme 

western   part   of 

country,       chief 

field     being     in 

Wash 7 

Total..          19,607 


ORIGINAL  COAL  RESOURCES 
Anthracite   Bituminous  Lignite  Total 

(in  millions  of  gross  tons) 


COAL    RE- 
SOURCES AT 
BEGINNING 
OF  1919 


492,810     ...   511,605   500,762 


472,767      ...   473,124   470,139 


20,616    20,616 


20,596 


40,672  1,115,154  1,155,826  1,155,452 


909,952   637,808  1,548,208  1,547,265 


10,213    47,730    57,950    57.830 
1,926,414  1,821,308  3,767,329  3,752,044 


es  deposits  of  coal  within  3,000  feet  of  surface  except  that  in  the  Rocky  Mountain 
595  billion  tons  of  bituminous  coal  from  3,000  to  6,000  feet  below  surface  have 


luded. 


8  SOME  GREAT  COMMODITIES 

the  richest  portion  of  which  lies  in  Upper  Silesia;  and 
fourth,  the  Donetz  Basin,  bordering  the  Black  Sea,  in 
Russia.  It  is  only  in  the  industrial  countries  of  western 
Europe,  which  collectively  possess  less  than  10  per  cent, 
of  total  world  reserves,  that  full  utilization  of  coal  re- 
sources is  yet  being  made. 

UTILIZATION  OF  COAL  RESOURCES 

There  is  a  striking  divergence  among  various  countries 
as  regards  their  relative  utilization  of  coal  reserves.  This 
is  indicated  in  Table  C,  which  compares  resources  with 
production  in  1913,  the  latest  year  of  normal  production. 
The  United  Kingdom,  the  coal  production  of  which  ranks 
second  only  to  that  of  the  United  States,  and  which  in 
1913  supplied  nearly  one-fourth  of  the  world's  total  pro- 
duction, possesses  less  than  three  per  cent,  of  the  aggregate 
coal  resources.  Germany,  with  deposits  amounting  to 
only  6  per  cent,  of  the  world's  resources,  in  1913  supplied 
over  one-fifth  of  the  total  output  of  coal.  Among  Asiatic 

TABLE  C  —UTILIZATION  OF  COAL  RESOURCES 

PRODUCTION  IN  1913  RESOURCES 

Country  Millions  Per  cent.  Millions  Per  cent, 

of  tons  of  total  of  tons  of  total 

United  States..  509  38.6  3,756,277  51.8 

United  Kingdom 287  21.7  186,540  2.6 

Germany 273  20.7  416,670  5.7 

Austria-Hungary 53  4.0  58,334  .8 

France 40  3.0,  17,305  .2 

Russia  (European) 33  2.5  230,289  3.2 

Belgium 22  1.7  10,826  .1 

Japan 21  1.6  7,844  .1 

India 16  1.2  77,753  1.1  t 

China 14  1.1  979,864  13.5 

Canada...  13  1.0  1,215,268  16.8 

Australia 12  .9  162,928  2.2 

Other  countries 2.0  139,068  1.9 

Total..  1,320  100  7,258,966  100 


COAL  9 

countries,  Japan  possesses  the  smallest  resources  and  pro- 
duces the  most  coal.  Canada  and  China,  on  the  other  hand, 
with  17  per  cent,  and  14  per  cent,  respectively  of  the 
world's  resources,  each  supplied  but  i  per  cent,  of  the  total 
coal  output. 

COAL  PRODUCTION  OF  THE  WORLD 

The  steady  and  rapid  expansion  of  world  coal  output 
prior  to  the  war  is  a  close  index  of  the  remarkable  develop- 
ment of  modern  industrial  activity.  A  half  century  ago, 
production  aggregated  211  million  gross  tons;  by  1900  it 
had  increased  to  755  million  tons,  and  by  1913,  to  1,321 
million  tons.  While  the  annual  increase  in  output  varied 
considerably,  it  had  been  growing  consistently  and  for 
some  years  prior  to  1913  averaged  more  than  50  million 
tons  per  year. 

This  expansion  of  world  production  was  ended  by  the 
war.  Since  1913  not  only  has  the  yearly  increase  been  lost 
but  there  has  been  a  positive  decline  in  coal  production. 
Estimated  world  production  in  1920,  a  year  of  intense 
demand,  was  25  million  tons  less  than  the  output  of  1913. 
The  difference  between  the  actual  output  of  1920  and  the 
potential  output  had  the  pre-war  rate  of  increase  continued, 
amounts  to  nearly  400  million  tons.  This  huge  disparity 
is  a  graphic  indication  of  the  tremendous  industrial 
disorganization  wrought  by  the  war,  which  reduced  the 
world's  capacity  not  only  to  produce  coal  but  to  consume  it. 

Beyond  such  impairment,  however,  practically  all  in- 
dustrial countries  were  suffering  from  a  shortage  of  coal 
below  actual  physical  requirements,  and  this  shortage  by 
1920  was  reaching  an  acute  stage  when  the  abrupt  reaction 
of  commerce  and  industry  further  reduced  coal  consump- 


TABLE  D— WORLD  PRODUCTION  OF  COAL*  (INCLUDING 


Country 


1913 


1914 


1915 


North  America— Canada— Coal »  i  10,253 

Lignite »  »  1,592 

Total 13,404  12,176  11,845 

Mexico 877»  689»  591* 

United  States 508,890  458,502  474,658 

South  America— Brazil 15»  30*  59» 

Chile 1,263  1,070  1,153 

Peru 270  279  286 

Europe— Austria— Coal 16,200  15,301  75,529 

Lignite 26,946  23,208  21,669 

Total 43,146  38,509  37,495 

Belgium 22,481  16,450  13,954 

Bulgaria 352  415  525 

Czechoslovakia— Coal «  «  « 

Lignite...  «  «  « 

Total «  «  « 

France* 40,199  27,093  19,224 

Germany*— Coal 187,107  158,836  144,548 

Lignite 55,855  52,372  85,559 

Total 272,962  241,208  231,107 

Greece »  20  39 

Hungary— Coal 1,299  1,098  1,080 

Lignite 5,5/3  7,932  8,035 

Total 10,112  9,030  9,115 

Italy— Coal 11  9 

Lignite 685  755  924 

Total 687  767  933 

Jugoslavia 306™  197*    »  197*    » 

Netherlands— Coal 1,843  1,898  2,226 

Lignite 

Total 1,843  1,898  2,226 

Poland •  s  « 

Portugal 25  29  39 

Rumania 237  268  304 

Russia  (European) 33,280  32,665  30,167 

Spain— Coal 3,952  4,068  4,290 

Lignite 273  257  323 

Total 4,225  4,355  4,613 

Spitzbergen 34  39  28 

Sweden 358  361  406 

Switzerland . .  . .  39* 

United  Kingdom 287,431  265,665  253,209 

Asia— British  India 16,208  16,464  17,104 

China 13,561  9,126  17,716 

Chosen 126  180  225 

Federated  Malay  States »  «  12 

Indo-China 423  610  634 

Japan 21,397  22,402  20,673 

Russia  (Asiatic) 2,128  2,415  2,212 

Turkey 829  651  489 

Africa— Rhodesia 243  349  410 

Union  of  South  Africa 8,801  8,478  8,281 

Oceania— Australia 12,418  12,445  11,415 

British  Borneo 98  99  115 

Dutch  East  Indies 559  612  609 

New  Zealand 1,886  2,204  2,209 

Estimated  World  Production 1,321,000          1,188,000  1,175,000 

*In  thousands  of  gross  tons. 

iNot  reported  separately. 

*  Estimated. 

•Not  available. 

•Included  in  production  for  Austria  and  Hungary.  Production  in  territory  now 
included  in  Czechoslovakia  was,  in  1913,  coal  14,046,000,  lignite  22,653,000,  total 
36,699,000  tons. 

5  Beginning  with  1920,  production  of  Saar  district   has  been  included  with  that  of 
France.    Saar  output  in  1920  was  9,261,000  tons  and  in  1921,  9,669,000  tons. 

IO 


LIGNITE)  BY  PRINCIPAL  COUNTRIES,  1913  TO  1921 


1916 


1,265,000 


1917 


1918 


1919 


1920 


1,329,000 


1,312,000          1,150,000         1,296,000 


•  Saar  production  excluded  in  1920  and  1921. 

7  Less  than  1,000  tons. 

8  Included  with  German,  Austrian  and  Russian  production 


1921 


10.904 

10,056 

10,492 

9,602 

11,626 

10,468 

2,028 

2,486 

2,881 

2,613 

3,224 

2,873 

12,932 

12,542 

13,373 

12,215 

14,850 

13,341 

492* 

492* 

424 

683 

» 

» 

526,871 

581,606 

605,543 

494,598 

576,745 

441,515 

98* 

98* 

98* 

8 

• 

• 

1,396 

1,515 

1,493 

1,314 

1,044 

i 

302 

340 

326 

325 

355 

i 

17324 

16,465 

14,084 

89 

131 

135 

22,833 

21,284 

17,825 

1,975 

2,371 

2,360 

40,157 

37,749 

31,909 

2,064 

2,502 

2,495 

16,597 

14,696 

13,672 

18,191 

22,035 

21,463 

630 

749 

662 

568 

745 

738 

4 

4 

« 

9,710 

10,967 

11,464 

4 

4 

4 

16,811 

19,629 

20,718 

4 

4 

4 

26,521 

30,596 

32,182 

20,974 

28,459 

25,844 

22,087 

34,162 

38,187 

156,656 

165,098 

155,755 

114,864 

129,273 

133,641 

92,693 
249,349 

94,034 
259,132 

99,010 
254,765 

92,167 
207,031 

109,871 
239,144 

121,068 
254,709 

115 

155 

1572 

180 

180 

132 

i 

1,202 

i 

i 

i 

i 

7,490 

i 

i 

i 

i 

8,858* 

8,692 

7,874» 

3,840 

4,885 

5,948 

18 

45 

32 

109 

149 

110 

1,263 

1,631 

2,084 

1,111 

1,547 

1,003 

1,281 

1,676 

2,116 

1,220 

1,696 

1,113 

197«  10 

1971  10 

248«> 

2,458 

3,173 

3 

2,614 

2,960 

3,346 

3,484 

4,050 

4,102 

42 

1,459 

1,852 

1,374 

120 

2,614 

3,002 

4,805 

5,336 

5,424 

4,222 

8 

8 

8 

6,164» 

6,555» 

6,995* 

49* 

59* 

89* 

144 

166 

i 

295* 

2952 

2958 

1,516 

1,481 

i 

31,003* 

27,951* 

14,451 

6,361 

6,065 

9,695 

4,771 

4,962 

6,409 

5,614 

5,535 

4,932 

466 

628 

715 

531 

544 

402 

5,237 

5,590 

7,124 

6,145 

5,879 

5,334 

20 

39 

59 

87 

118 

a 

408 

436 

398 

422 

433 

i 

59* 

89* 

144 

64 

73 

11 

256,377 

248,501 

227,749 

229,780 

229,533 

164,355 

17,254 

18,213 

20,722 

22,628 

17,083 

16,928 

21,357 

21,653* 

21,653* 

18,003 

19,177 

t 

188 

192 

185 

220 

• 

i 

102 

155 

169 

191 

248 

i 

674 

644 

626 

655 

689 

» 

23,194 

26,826 

28,664 

32,187 

30,333 

24,113 

1,968* 

1,968* 

1,984 

1,807 

1,513 

2,346 

239 

362 

349 

474 

689 

• 

492 

549 

448 

455 

517 

513 

10,008 

10,383 

8,819 

9,166 

10,244 

10,169 

9,814 

10,237 

10,949 

10,567 

12,968 

12,867 

109 

98* 

98» 

s 

9 

i 

737 

819 

820 

934 

1,078 

• 

2,257 

2,068 

2,034 

1,848 

1,844 

i 

1,100,000 


1913  output  of  territory 

Silesia  assigned  to  Poland  in  the   autumn  of 
1921. 

"Serbia  only;  total  production  in  territory  now  included  in  Jugoslavia  was,  in  1913, 
3,551,000  tons. 


now  Polish  (not  including  Upper  Silesia)  was  9,022,000  tons. 
•Not  including  that   part    of  Upper  Siles 


II 


12  SOME  GREAT  COMMODITIES 

tion  and  converted  the  shortage  into  a  surplus.  As  a 
result  of  world-wide  industrial  depression,  the  production 
of  coal  suffered  still  further  curtailment.  The  output  of 
1921  is  estimated  at  no  more  than  1,100  million  tons,  the 
smallest  production  of  any  year  since  1909.  The  situa- 
tion is  indicated  by  Table  D,  which  contains  production 
data  as  far  as  available  for  the  leading  coal-producing  coun- 
tries for  the  period  from  1913  to  1921. 

The  countries  listed  in  Table  D,  it  may  be  noted,  fall 
into  two  groups,  as  respects  the  influence  of  the  war  on 
coal  output.  One  group  is  comprised  of  those  countries 
in  which  the  war,  by  destruction  of  mines,  drains  on  man 
power  and  general  economic  disorganization,  forced  a 
serious  curtailment  of  production.  It  includes  the  Euro- 
pean belligerents  (with  the  exception  of  Italy)  and  such 
non-European  countries  as  Canada  and  Australia.  Of 
this  group  Belgium  and  Canada  were  the  only  important 
producers  which  had  by  1920  succeeded  in  restoring  their 
coal  production  to  the  pre-war  level. 

The  other  group  comprises  countries  in  which  the  scar- 
city and  high  price  of  coal  stimulated  an  expansion  of  out- 
put, in  some  cases  at  least  beyond  the  point  of  profitable 
operation  under  more  normal  conditions.  In  this  group 
are  the  European  neutrals,  Italy,  and  the  majority  of  non- 
European  producing  countries,  such  as  Japan,  China, 
India,  South  Africa  and  the  United  States.  As  a  net  re- 
sult, the  European  production  for  1920 — the  second  year 
after  the  war  and  a  period  of  urgent  demand  for  coal — 
was  approximately  125  million  tons  below  the  1913  output. 
The  production  of  the  rest  of  the  world  for  1920  exceeded 
its  pre-war  output  by  about  100  million  tons;  a  net  reduc- 
tion in  production  of  25  million  tons. 


COAL  13 

Three  countries,  it  will  be  noted  from  Table  D,  hold  a 
strikingly  dominant  position  in  coal  production.  These 
are  the  United  States,  with  over  44  per  cent,  of  world 
output  in  1920,  the  United  Kingdom,  with  18  per  cent, 
and  Germany  with  19  per  cent,  of  the  aggregate.  The 
next  country  in  rank  is  France,  which  produces  less  than 
3  per  cent,  of  the  world's  total. 

COAL  PRODUCTION  IN  THE  UNITED  STATES 

The  United  States,  with  its  unrivaled  coal  resources  and 
tremendous  industrial  demand,  assumed  first  place  among 
coal-producing  nations  about  the  beginning  of  the  twentieth 
century.  Since  then,  its  output  has  more  than  doubled. 

The  mining  of  the  two  kinds  of  coal  produced  in  the 
United  States,  anthracite  and  bituminous,  constitutes  two 
fairly  distinct  industries.  Production  of  anthracite,  which 
comprises,  on  the  average,  only  15  per  cent,  of  the  total 
output,  is  practically  confined  to  a  region  in  eastern  Penn- 
sylvania having  an  extent  of  about  480  square  miles. 
Mining  is  largely  centralized  in  the  hands  of  a  few  pro- 
ducers, and  production  has  become  fairly  stable,  fluctuat- 
ing between  79  million  and  89  million  tons  in  the  period 
since  1913.  The  market  for  anthracite  is  also  relatively 
stable.  About  55  per  cent,  of  the  output  is  normally 
used  for  domestic  consumption,  22  per  cent,  is  employed 
in  industry  and  the  heating  of  large  buildings,  7  per  cent, 
is  taken  by  railroads,  5  per  cent,  is  exported  and  the  bal- 
ance is  consumed  at  the  mines.  Consumption  of  anthra- 
cite is  centered  in  the  northeastern  part  of  the  country. 
Aside  from  anthracite  consumed  by  railroads,  two-thirds 
of  the  output  is  used  in  the  Middle  Atlantic  States;  New 
England  receives  15  per  cent.,  the  North  Central  States 


14  SOME  GREAT  COMMODITIES 

15  per  cent.,  while  the  South  and  West  take  only  3  per 
cent.     The  limited  extent  of  anthracite  reserves  and  the 
increasing  depths  to  which  workings  must  be  carried  re- 
strict output  and  prevent  its  becoming  a  more  important 
factor  in  the  coal  situation. 

Bituminous  coal  constitutes  the  bulk  of  the  American 
output.  It  is  mined  commercially  in  thirty-one  states; 
most  of  it,  however,  is  produced  within  a  comparatively 
limited  area  in  the  eastern  part  of  the  country.  Over 
65  per  cent,  of  the  total  1920  output  was  mined  in  the 
Appalachian  region,  extending  from  Pennsylvania  to 
Alabama,  a  result  in  part  of  the  quality  and  abundance 
of  the  coal,  and  in  part  of  the  concentrated  industrial 
demand  of  the  northeastern  section  of  the  United  States. 
Table  E  indicates  the  current  output  of  those  states  which 
in  I92O1  produced  one  or  more  per  cent,  of  the  total  bitu- 
minous output.  It  also  affords  a  comparison  of  their 

TABLE  E— PRODUCTION  OF  BITUMINOUS  COAL  BY  STATES 

State  1909-13  1920  1921 

(5  yr.-aver.) 

(in  thousands  of  gross  tons) 

Pennsylvania 137,267  150,074  100,000 

West  Virginia 55,616  79,867  63,571 

Illinois 48,569  79,135  60,268 

Ohio 29,221  40,208  28,571 

Indiana 14,264  25,974  16,964 

Alabama 14,038  14,411  10,893 

Kentucky 13,478  31,722  26,786 

Colorado 9,475  10,959  8,152 

Iowa 6,756  6,942  4,464 

Wyoming 6,327  8,592  6,652 

Virginia 6,214  10,039  6,964 

Tennessee 5,945  5,880  3,929 

Kansas 5,763  5,213  3,214 

Utah 2,423  5,362  3,571 

Other  states 25,249  28,739  19,394 

Total 380,605         503,117     363,393 

^Comparisons  are  made  on  the  basis  of  1920  figures,  because  that  year  was  one  of  active 
demand  for  coal,  while  1921  was  a  year  of  serious  depression. 


COAL  15 

current  output  with  pre-war  average  production.  Penn- 
sylvania, it  will  be  noted,  is  by  far  the  leading  producer, 
but  its  output  is  not  now  increasing  at  a  rapid  rate,  the 
1920  output  being  only  9  per  cent,  above  its  pre-war  aver- 
age. Illinois'  production  in  1920  was  no  less  than  63  per 
cent,  in  excess  of  its  pre-war  average.  Among  other  im- 
portant producing  states,  Indiana  increased  its  output 
82  per  cent.,  Ohio  38  per  cent.,  and  West  Virginia  44  per 
cent.,  while  Kentucky's  1920  production  was  135  per  cent, 
greater  than  its  pre-war  average. 

DOMESTIC  COAL  TRADE  OF  THE  UNITED  STATES 

Detailed  information  as  to  coal  consumption  in  the 
United  States  is  not  currently  available.  The  United 
States  Fuel  Administration,  however,  compiled  informa- 
tion covering  the  several  classes  of  consumption  for  the 
year  1917,  and  these  data,  presented  in  Table  F,  may  be 
taken  as  indicating  approximately  the  normal  distribution 
of  coal  to  different  groups  of  consumers.  The  predomi- 
nance of  industrial  and  railroad  requirements  is  noteworthy; 
the  export  trade  on  the  contrary  is  relatively  insignificant. 

TABLE  F — CONSUMPTION  OF  COAL  IN  THE  UNITED  STATES  BY  CLASSES 

Consumption 

Claco  of  ,,«e  in  1917  Per  cent. 

Class  of  use  (in  thouganda       of  total 

of  gross  tons) 

Industrial  plants 155,900  32 

Railroads 137,200  28 

Coke,  beehive  and  byproduct 74,800  15 

Domestic  consumers 51,000  10 

Gas  and  electric  public  utilities 32,700  7 

Exports 20,400  4 

Power  and  heat  at  coal  mines 10,800  2 

Bunker,  foreign 6,000  1 

Bunker,  domestic,  including  Great  Lakes 3,200  1 

Total...  492,000          "lOO 


1 6  SOME  GREAT  COMMODITIES 

The  distribution  of  bituminous  coal  from  the  different 
fields  to  various  markets  in  the  United  States  is  highly 
complex.  It  is  determined  in  part  by  the  character  of  the 
coal  and  its  suitability  for  particular  requirements,  and 
in  very  large  part  by  the  competitive  position  of  other 
fields  and  by  freight  rates.  The  latter,  because  of  the 
bulk  of  coal  in  proportion  to  its  value,  are  of  decided  im- 
portance in  influencing  its  markets.  Much  of  the  coal 
in  the  interior  field  is  of  inferior  quality,  and  the  competi- 
tion of  better-grade  Appalachian  coals  confines  it  to  local 
markets  where  it  has  a  considerable  advantage  in  cost 
of  transportation.  In  the  west  the  coal  of  the  Rocky 
Mountain  fields  supplies  local  needs  and  in  good  part  the 
requirements  of  the  Pacific  States  also.  In  the  southwest 
coal  faces  the  competition  of  oil,  which  for  many  purposes 
is  the  dominant  fuel. 

The  Appalachian  fields  extend  from  Pennsylvania  to 
Alabama.  Coal  produced  in  the  southern  part  of  these 
fields,  including  Alabama,  Georgia,  Tennessee  and  south- 
eastern Kentucky,  is  largely  consumed  by  railroads  serving 
the  region  and  by  the  iron  and  steel  industries  centering 
about  Birmingham.  Certain  of  the  coals  of  southeastern 
Kentucky,  however,  enjoy  a  wide  market  by  reason  of 
their  quality,  and  are  shipped  in  good  volume  north  of 
the  Ohio  and  to  lake  ports  and  west  of  the  Mississippi. 

Coals  from  the  middle  and  northern  portions  of  the 
Appalachian  fields  are  predominant  from  the  point  of  view 
of  both  quantity  and  quality.  These  coals  furnish  the 
bulk  of  coke  produced,  afford  power  for  the  concentrated 
industrial  activities  of  the  northern  and  eastern  part  of 
the  country,  move  in  large  volume  to  the  interior  of  the 
United  States,  constitute  the  bulk  of  shipments  to  Canada 


COAL  17 

and  provide  most  of  the  ocean-borne  exports  from  the 
country. 

Rapid  as  has  been  the  increase  in  consumption  of  coal 
in  the  United  States,  the  area  under  exploitation  and  the 
mechanical  equipment  available — the  productive  capac- 
ity of  the  mines — have  far  outrun  the  growth  of  demand. 
The  maximum  actual  production  of  bituminous  coal  was 
518  million  tons  in  1918.  The  physical  capacity  of  the 
mines  has  been  estimated  at  from  600  million  to  800  mil- 
lion gross  tons  per  annum.  This  overdevelopment  occa- 
sions a  serious  wastage  of  the  capital  and  labor  engaged 
in  the  industry.  The  average  loss  of  time  in  the  last 
thirty  years  has  approximated  30  per  cent.,  and  even  in 
1918,  the  year  of  maximum  activity,  over  20  per  cent,  of 
the  full  working  time  was  lost. 

In  some  measure  this  situation  is  due  to  daily  fluctua- 
tions in  output  which,  particularly  at  times  of  active  de- 
mand, are  occasioned  by  car-shortage.  In  good  part  it  is 
due  to  the  decided  seasonal  fluctuation,  as  between  sum- 
mer and  winter,  in  the  demand  for  coal,  and  to  the  im- 
practicability of  storing  it  at  the  mines  in  any  sufficient 
quantity.  The  resulting  fluctuations  in  the  production 
of  coal  are  shown  in  Table  G.  The  average  monthly  out- 
put for  the  period  1913—1920  is  used  as  a  basis,  from  which 
are  computed  the  percentages  which  the  average  output 
by  months  constitutes  of  this  base. 

Beyond  variations  due  to  these  causes,  coal  production 
is  highly  sensitive  to  changes  in  demand  which  are  occa- 
sioned by  the  cycles  of  business  activity  and  depression. 
The  bulk  of  coal  is  sold  on  contract,  and  the  concentration 
of  a  growing  demand  on  the  relatively  limited  volume  of 
"free"  coal  often  produces  a  substantial  and  sometimes  a 


1 8  SOME  GREAT  COMMODITIES 

spectacular  rise  in  spot  prices.  This  instability  in  price 
is  in  good  measure  the  cause  of  the  overdevelopment  of 
American  mining  capacity.  The  reserves  of  coal,  and  the 
ownership  of  reserves,  are  so  extensive  that  a  period  of 
comparatively  high  prices  encourages  the  development  of 
many  new  mines.  After  increased  production  or  slack- 
ened demand  has  caused  a  lowering  of  prices,  there  are 

TABLE  G— SEASONAL  FLUCTUATIONS  IN  COAL  PRODUCTION 
IN  THE  UNITED  STATES 

Quantity          Per  cent, 
(in  thousands  of 

of  gross  tons)          base 

Base  =  Average  Monthly  Production  1913-20. . . .  37,129  100 

Average  Production  1913-20  for— 

January 38,686  104 

February 33,919  91 

March 37,405  101 

April 31,180  84 

May 34,550  93 

June 35,787  96 

July 37,479  101 

August 39,562  107 

September 39,773  107 

October 42,621  115 

November 36,609  99 

December 37,974  102 

strong  incentives  to  continue  operations  in  order  that 
carrying  charges  on  the  investment  already  made  may  be 
earned.  Similarly,  many  concerns  which  for  speculative 
purposes  or  to  anticipate  competition  have  acquired  ex- 
tensive holdings  of  coal  land,  are  compelled  to  develop  the 
properties  and  open  mines  in  order  to  meet  charges  on 
the  investment.  The  result  of  these  factors  is  an  increase 
of  idleness  in  times  of  slack  demand,  and  a  dilution  of  car- 
supply  and  consequent  enforced  idleness  when  demand  is 
active,  that  constitute  a  serious  loss  to  the  industry  and 
to  the  country  as  a  whole. 


COAL  19 

The  course  of  coal  prices  in  the  United  States  for  the 
period  since  1913  is  shown  in  Table  H.  Prices  are  quoted 
for  anthracite  stove  coal,  of  importance  as  a  domestic 
fuel,  and  for  bituminous,  Pittsburgh  mine  run,  as  represen- 
tative of  industrial  fuel. 

TABLE  H— WHOLESALE  PRICES  OF  COAL  IN  THE  UNITED  STATES, 
BY  QUARTERS,  1913  TO  19211 

Bituminous — Pittsburgh  District  Anthracite — Stove 

v  run  of  mine,  f .  o.  b.  mine  f.  o.  b.  mine 

January      April      July    October  January    April      July      October 
(in  dollars  per  net  ton)  (in  dollars  per  gross  ton) 


1913  

...  1 

30 

1.30 

1 

35 

1.40 

4.00 

3.50 

3 

80 

4.00 

1914  

1 

30 

1.30 

1 

30 

1.30 

4.00 

3.50 

3 

80 

4.00 

1915 

1 

15 

1  05 

1 

00 

1  05 

4.00 

3  50 

? 

80 

4  00 

1916 

1 

?5 

1.05 

1 

30 

3  25 

4.10 

3  60 

4 

?0 

4  40 

1917 

.  .  4 

?5 

3.25 

3 

00 

2.00 

4.40 

3.90 

4 

?0 

4  70 

1918 

..  2 

45 

2.45 

2 

35 

2.35 

5.05 

4.75 

4 

75 

5  05 

1919  ..  . 

...  2 

35 

2.25 

2 

?5 

2.35 

6.10 

6.10 

6 

40 

6  60 

1920  

2 

35 

4.25 

10 

00 

9.00 

6.60 

6.60 

7 

65 

8.00 

1921  

...  2 

75 

2.75 

2 

50 

2.25 

8.00 

7.40 

7 

90 

8.50 

1Prices  are  for  available  dates  nearest  15th  of  months  specified. 

THE  INTERNATIONAL  COAL  TRADE 

The  number  of  countries  which  produce  a  net  surplus 
of  coal  above  their  domestic  requirements,  which  may  be 
used  to  meet  the  fuel  needs  of  less  favoured  nations,  is 
extremely  small.  In  the  Western  Hemisphere,  the  United 
States  alone  has  a  surplus  of  coal  for  export;  and  this,  while 
it  is  large  in  comparison  with  the  surpluses  of  most  other 
nations,  is  of  small  proportions  when  compared  with  the 
tremendous  domestic  consumption  of  coal.  The  total 
output  of  South  American  countries  in  1913  was  less  than 
1,600,000  tons  or  about  one-sixth  of  their  consumption. 

In  Asia,  Japan  normally  has  a  surplus  of  approximately 
three  million  tons  which  is  exported  to  Shanghai,  Hong- 
kong, the  Philippines  and  Singapore.  China's  output  is 


20  SOME  GREAT  COMMODITIES 

no  more  than  sufficient  to  meet  its  own  requirements. 
The  bulk  of  Indian  production  is  required  by  the  railroads 
and  growing  industries  of  the  country.  Indo-China  pro- 
duces approximately  650,000  tons  of  anthracite  of  which 
more  than  half  is  exported. 

Australia  normally  produces  a  surplus.  New  Zealand 
on  the  contrary  has  to  import  coal  from  the  former  coun- 
try. Australian  coal  is  extensively  used  in  bunkering  in 
the  Pacific,  and  is  also  shipped  to  the  Dutch  East  Indies, 
Singapore,  Colombo,  the  west  coast  of  South  America  and 
in  small  amounts  even  to  the  west  coast  of  the  United 
States.  The  South  African  mines  support  a  growing  ex- 
port trade  and  some  of  their  coals  which  are  of  good  steam- 
ing quality  are  in  demand  for  bunkerage  at  South  African 
and  Indian  ports. 

In  Europe,  Great  Britain  and  Germany  are  the  only 
countries  which  are  in  a  position  to  export  coal  in  quantity. 
Other  countries  must  import.  Great  Britain  and  Ger- 
many are  the  dominating  factors,  the  former  in  the  ocean- 
borne  trade,  the  latter  in  the  land  trade  of  Europe. 

BRITISH  COAL  TRADE 

Coal  is  Great  Britain's  most  important  natural  resource, 
and  has  been  utilized  to  make  that  nation  the  world's 
greatest  exporter  of  coal,  both  in  the  form  of  coal  for  bun- 
kerage, and  exports  in  the  strict  sense.  Table  I  affords  a 
comparison  of  the  pre-war  and  post-war  exports  from  Great 
Britain. 

It  will  be  noted  that  British  exports  to  all  countries  have 
been  reduced,  in  many  cases  most  substantially,  and  the 
total  for  1921  amounted  to  only  36  million  tons,  against 
85  million  for  the  pre-war  average.  This  is  a  consequence 


COAL 


21 


of  the  decline  of  British  production,  which  in  1913  was 
287  million  gross  tons  and  in  1920  only  230  million  tons. 
In  1921,  a  prolonged  miners'  strike  reduced  the  output  for 
the  first  six  months  to  55  million  tons,  the  output  for  the 


TABLE  I— EXPORTS  OF  COAL  FROM  THE  UNITED  KINGDOM 


Country 

Countries  around  the  North  Sea — 

Belgium 

Denmark 

Germany 

Netherlands 

Norway 

Russia  and  Finland 

Sweden 

Remainder  of  Europe,  and  Egypt — 

Egypt 

France 

Greece 

Italy 

Portugal 

Spain 

South  America — 

Argentina 

Brazil 

Chile 

Uruguay 

Countries  not  specified  above  . . . 

Total 

Bunker,  vessels  in  foreign  trade. . 

Grand  total. . 


1919 


1920 


1921 


1909-13 
(5-yr.  aver.) 

(in  thousands  of  gross  tons) 


1,707 
2,848 
8,999 
2,162 
2,069 
4,008 
4,094 

2,873 

10,647 

604 

9,183 

1,024 

2,190 

3,129 

1,604 

690 

895 

6,795 

65,521 
19,565 


85,086         47,271    38,772    35,587 


144 

671 

618 

1,743 

1,040 

1,804 

13 

818 

402 

239 

1,788 

1,331 

801 

694 

221 

93 

139 

1,592 

1,372 

1,233 

1,675 

985 

1,018 

16,205 

11,691 

6,396 

139 

98 

249 

4,641 

2,905 

3,383 

544 

301 

436 

806 

290 

1,021 

639 

274 

887 

189 

158 

242 

7 

7 

23 

185 

117 

222 

4,787 

3,877 

3,690 

35,250 

24,932 

24,661 

12,021 

13,840 

10,926 

year  being  164  million  tons.  Despite  this  handicap  and 
the  general  depression  in  the  international  coal  trade, 
British  exports  to  other  countries  in  1921  were  approxi- 
mately equal  to  exports  in  the  preceding  year. 

Should  the  curtailment  of  British  coal  exports  prove 
permanent  it  would  have  no  small  influence  on  the  future 
of  the  country's  foreign  trade.  Upon  ability  to  export 


22  SOME  GREAT  COMMODITIES 

coal  depends  Great  Britain's  ability  in  large  measure  to 
import  the  raw  materials  necessary  for  the  carrying  on  of 
her  great  industrial  life. 

British  exports,  other  than  coal,  are  chiefly  in  the  form 
of  light  manufactured  goods.  To  produce  these  goods 
and  to  support  a  dense  industrial  population,  it  is  neces- 
sary to  import  bulky  raw  materials  and  foodstuffs.  Coal 
is  the  export  ballast  that  makes  British  import  trade  pos- 
sible. Its  use  in  balancing  incoming  and  outgoing  car- 
goes is  of  great  effect  in  reducing  the  cost  of  ocean 
transportation,  for  example,  on  such  commodities  as  grain 
from  Argentina  and  iron  ore  from  Brazil.  Conversely,  the 
curtailment  of  the  surplus  of  coal  for  export  has  been  felt 
in  inability  to  secure  ore  supplies  from  overseas  when 
desired,  because  it  was  not  possible  to  provide  inward  ore 
ships  with  outward  freights  of  coal. 

The  decrease  in  production  has  occurred  in  spite  of  an 
increase  in  the  number  of  miners  employed,  and  the  de- 
cline in  output  per  man  is  a  matter  of  serious  concern  to 
the  British  public.  Output  of  coal  per  man  in  Great 
Britain,  which  was  practically  stationary  during  the  four 
years  preceding  the  war,  and  actually  increased  during 
1915,  has  sharply  declined  since  1916,  although  tending 
to  improve  in  1922.  In  this,  British  experience  is  in 
marked  contrast  with  that  in  the  United  States,  where, 
with  occasional  recessions,  output  per  man  has  been  in- 
creasing steadily  for  a  considerable  period.  Table  J  com- 
pares the  two  countries  in  this  respect  for  the  period  from 
1910  to  1920. 

There  has  been  wide  divergence  of  opinion  as  to  where 
responsibility  for  declining  British  production  and  low 
output  per  man  rests.  In  part  it  is  due  to  partial  exhaus- 


COAL  23 

tion  of  mines  and  increasing  depths  to  which  workings 
must  be  carried.  Shortage  of  underground  equipment 
and  railway  cars  has  been  a  factor.  'Serious  labor  difficul- 
ties have  accounted  for  much  of  the  curtailment.  A  con- 


TABLE  J— AVERAGE  COAL  OUTPUT  PER  MAN,  GREAT  BRITAIN 
AND  UNITED  STATES 

VAO_  Great  Britain      United  States 

(in  gross  tons) 

1910. .  252  618 

1911 255  614 

1912 239  660 

1913 258  681 

1914 234  601 

1915 265  647 

1916 256  731 

1917 243  768 

1918. 225  794 

1919 193  713 

1920 182  743 

siderable  factor  is  the  relatively  small  use  of  machine 
mining  in  Great  Britain.  For  the  five  years  1909-1913 
machine-mined  coal  averaged  but  7  per  cent,  of  total  Brit- 
ish production,  as  compared  with  37  per  cent,  for  the  same 
period  in  the  United  States.  Since  then  machine  mining 
has  increased  somewhat,  particularly  in  the  Scottish  mines 
where  about  one-quarter  of  the  coal  is  now  machine- 
mined.  In  the  Welsh  coal  fields,  however,  only  2  per  cent, 
of  the  output  is  reported  as  machine  mined.  The  slow 
progress  of  machine  production  in  Great  Britain  is  a  result 
partly  of  hostility  on  the  part  of  miners,  who  fear  that 
its  adoption  would  cause  a  dearth  of  work  for  many  men 
now  employed  at  the  mines.  In  part  it  is  a  result  of  the 
fact  that  many  British  mines  are  physically  ill-suited  to 
machine  methods. 
It  may  be  questioned  whether,  in  the  pre-war  period, 


24  SOME  GREAT  COMMODITIES 

Great  Britain  had  not  reached  the  zenith  of  its  position 
as  a  coal-exporting  nation.  Production  was  increasing 
only  slowly — in  the  period  from  1907  to  1912  it  fluctuated 
within  the  narrow  range  of  260  million  to  272  million  tons. 
Domestic  requirements  were  growing  and  will  in  the  future 
absorb  a  larger  proportion  of  output,  with  the  normal 
development  of  British  industry.  During  the  years  1907 
to  1912  exports  of  coal  were  practically  constant  at  from  62 
million  to  65  million  tons.  While  in  1913  exports  were 
substantially  larger,  the  increase  represented  an  abnormal 
rather  than  a  normal  development.  As  the  coal  require- 
ments of  other  nations  expand,  therefore,  it  is  probable 
that  they  will  have  to  be  met  from  other  sources,  and  that 
the  future  position  of  the  United  Kingdom  in  the  interna- 
tional coal  trade  will  gradually  become  relatively  less  dom- 
inant than  it  has  been  in  the  past. 

THE  GERMAN  POSITION 

Prior  to  the  war  Germany  dominated  the  land  coal  trade 
of  Europe.  Its  production  had  been  growing  steadily 
and  with  great  rapidity,  having  more  than  tripled  in  the 
period  from  1890  to  1913.  Of  the  total  1913  output  of 
273  million  tons,  187  million  tons  were  bituminous  coal 
and  86  million  tons  were  lignite,  much  of  which  must  be 
briquetted  before  it  can  be  used.  Lignite  plays  an  unim- 
portant part  in  Germany's  foreign  coal  trade  but  forms 
an  increasingly  important  element  in  domestic  consump- 
tion, a  development  which  was  hastened  by  Germany's 
isolation  during  the  war. 

The  volume  and  direction  of  pre-war  exports  of  German 
coal  and  coke  are  indicated  in  Table  K.  Austria  was  the 
principal  market  for  raw  coal,  while  the  Netherlands, 


COAL  25 

Belgium,  France,  Switzerland  and  Russia  also  took  sub- 
stantial quantities,  ranking  in  the  order  named.  The  iron 
works  of  French  Lorraine  were  by  far  the  most  important 
foreign  takers  of  German  coke.  Austria,  Belgium  and 
Russian  Poland  also  received  considerable  amounts. 

TABLE  K— AVERAGE  ANNUAL  EXPORTS  OF  COAL  AND  COKE  OF  DOMESTIC 
PRODUCTION  FROM  GERMANY,  1909  TO  1913 

r.  Coal  Coke 

(in  thousands  of  gross  tons) 

Austria-Hungary. .  10,128  867 

Belgium 4,685  539 

Denmark 170  42 

France 2,617  1,878 

Italy 550  136 

Netherlands 5,933  239 

Norway 24  36 

Russia  and  Finland 1,338  358 

Sweden 70  138 

Switzerland 1,414  150 

Other  countries 530  422 

Total 27,459  4,805 

Bunker,  foreign  vessels 247  1 

Grand  total 27,706  4,806 

While  in  1913  Germany  exported  more  than  44  million 
gross  tons  of  coal  or  its  equivalent  in  coke  and  briquettes, 
it  imported  somewhat  more  than  18  million  tons.  This 
interchange  is  an  illustration  of  the  influence  of  freight 
rates  on  coal  distribution,  irrespective  of  political  boun- 
daries. The  greater  part  of  the  import  consisted  of  Brit- 
ish coal  marketed  in  the  Baltic  provinces,  where,  by  reason 
of  lower  transportation  costs,  it  could  be  sold  more  cheaply 
than  coal  from  the  Ruhr  fields  in  Germany. 

Germany's  position  with  respect  to  coal  for  the  period 
from  1913  to  1920  is  summarized  in  Table  L.  It  will  be 
noted  that  the  practical  elimination  of  imports  during  the 
war  years  was  more  than  counterbalanced  by  a  reduction  of 


26 


SOME  GREAT  COMMODITIES 


exports  from  44,202,000  tons  in  1913  to  13,828,000  in  1918. 
Even  so,  there  was  some  curtailment  in  domestic  supplies 
of  coal  which  was,  however,  in  a  measure  offset  by  the 
growth  in  output  of  lignite,  from  85,855,000  tons  in  1913 
to  99,010,000  tons  in  1918.  The  further  curtailment  of 
domestic  consumption  of  bituminous  coal  in  1919  and  1920 
reflected  in  part  the  decreased  output  of  those  years,  as 
well  as  compulsory  reparations  deliveries  of  coal  to  the 
allied  nations. 


Year 


TABLE  L—  GERMAN  COAL  SITUATION,  1913  TO  1920 

Bituminous  Coal 
Production 


Imports       Exports* 

(in  thousands  of  gross  tons) 


1913 187,107 

1914 158,836 

1915 144,548 

1916 156,656 

1917 165,098 

1918 155,755 

1919 114,864 

1920 129,273 


11,145 

6,846 

2,616 

1,381 

575 

141 

48 

328 


44,202 
33,424 
22,373 
20,615 
18,658 
13,828 
8,431 
22,265 


154,050 
132,258 
124,791 
137,422 
147,015 
142,068 
106,481 
107,336 


Lignite 
production* 

85,855 
82,372 
86,559 
92,693 
94,034 
99,010 
92,167 
109,871 


^Including  reparations  deliveries  in  1919  and  1920. 
^Consumed  almost  entirely  in  Germany. 


The  Peace  has  affected  the  German  coal  position  pro- 
foundly, as  regards  both  production  and  domestic  require- 
ments. Major  territorial  changes  from  the  point  of  view 
of  the  coal  situation  were  the  cession  to  France  of  Alsace- 
Lorraine  permanently  and  of  the  Saar  mine  fields  for  a 
period  of  fifteen  years.  Upper  Silesia,  the  status  of  which 
was  not  determined  until  the  latter  part  of  1921,  has  been 
divided  between  Germany  and  Poland,  the  latter  receiving 
the  bulk  of  the  coal  reserves.  The  effect  of  territorial 
changes  on  the  German  coal  position  is  summarized  in 
Table  M,  which  compares  the  pre-war  production  and 


COAL  27 

consumption  of  territories  now  German,  as  well  as  of  the 
districts  which  are  now  separated  from  Germany. 

TABLE  M— COMPARISON  OF  GERMAN  PRODUCTION  AND  CONSUMPTION  OF 
COAL1  IN  1913,  BY  DISTRICTS 

Production      Consumption 

District  in  1913  in  1913 

(in  millions  of  gross  tons) 

Territory  remaining  definitely  German 126  114 

Upper  Silesia 

Region  allotted  to  Germany 11 

Region  allotted  to  Poland 32 

Total 43  14 

Alsace-Lorraine 6  11 

Saar  Basin 12  6 

Other  ceded  territory 5 

Luxemburg3 4 

Total "l8  ~26 

Grand  total 187  154 

iNot  including  lignite,  the  bulk  of  which  is  produced  and  consumed  in  territory  still 
German. 
JNot  available. 
'Formerly  included  in  the  German  Customs  Union. 

It  will  be  observed  that  apart  from  Upper  Silesia  the 
territory  definitely  ceded  by  Germany  consumed  consider- 
ably more  coal  than  it  produced — a  result  very  largely  of 
the  heavy  requirements  of  the  iron  and  steel  industries 
in  Alsace-Lorraine.  The  situation  with  respect  to  Upper 
Silesia  is  different.  That  region  produced  a  very  sub- 
stantial volume  above  its  local  requirements,  the  loss  of 
which  may  seriously  curtail  Germany's  ability  to  export 
coal. 

Beyond  such  territorial  changes,  the  treaty  of  peace 
made  elaborate  provisions  for  deliveries  of  coal1  to  allied 
countries.  By  its  terms  Germany  undertook  to  deliver 

*Data  respecting  Treaty  requirements  are  given  in  metric  tons,  which  may,  however, 
be  taken  as  the  practical  equivalent  of  the  gross  ton,  used  elsewhere  throughout  the  article. 


28  SOME  GREAT  COMMODITIES 

to  France  7,000,000  tons  of  coal  per  year  for  ten  years, 
and  in  addition,  for  a  period  not  exceeding  ten  years,  an 
amount  of  coal  equal  to  the  difference  between  the  annual 
pre-war  production  of  the  mines  in  the  devastated  regions 
of  France  and  the  production  of  those  mines  during  each 
year  of  the  ten-year  period.  Such  delivery  was  not  to 
exceed  20,000,000  tons  per  year  in  any  one  of  the  first 
five  years,  and  8,000,000  tons  in  any  year  of  the  succeeding 
five  years.  In  addition,  Germany  agreed  to  deliver  to 
Belgium  8,000,000  tons  of  coal  per  year  for  ten  years,  and 
to  Italy  an  annual  amount  beginning  at  4,500,000  tons 
for  the  year  ending  June,  1920,  and  gradually  increasing 
to  8,500,000  tons  per  year  for  each  of  the  six  years  1923 
to  1929.  Germany  further  undertook  to  deliver  annually 
to  Luxemburg,  if  so  directed  by  the  Reparation  Commis- 
sion, an  amount  of  coal  equal  to  the  pre-war  annual  con- 
sumption of  German  coal  in  Luxemburg. 

Germany  found  it  impossible  to  meet  the  payments 
called  for  by  the  treaty,  her  total  deliveries  from  August, 

1919,  to  the  end  of  May,  1920,  aggregating  only  5,100,000 
tons.     This  unsatisfactory  situation  led  to  the  Spa  con- 
ference, which   resulted   in  the  temporary  suspension  of 
treaty  requirements.     Germany  in  return  agreed  to  place 
at  the  disposal  of  the  allies  for  six  months  from  August  I, 

1920,  coal  at  the  rate  of  2,000,000  tons  per  month  of  which 
France  was  to  receive   1,500,000  tons,  Belgium  215,000 
tons,   Italy   200,000   tons    and   Luxemburg   35,000  tons. 
These  deliveries  have  been  made  by  Germany,  total  de- 
liveries in  1920  approximating  17  million  tons  of  coal  or 
its  equivalent  in  coke.     Since  the  termination  of  the  period 
covered  by  the  Spa  agreement,  the  quantities  to  be  de- 
livered have  been   fixed   periodically  by  the  Reparation 


COAL  29 

Commission,  the  monthly  quotas  in  the  latter  half  of  1921 
averaging  about  1,700,000  tons  and  at  the  beginning  of 
1922,  about  1,900,000  tons. 

Wholly  apart  from  the  reduction  in  output  caused  by 
the  loss  of  territory,  there  was  a  marked  falling  off  in  coal 
production,  occasioned  largely  by  disorganization  incident 
to  the  war  and  the  revolution.  Output  of  the  Ruhr  dis- 
trict, by  far  the  major  German  producing  region,  dropped 
from  113  million  tons  in  1913  to  70  million  tons  in  1919, 
rising  to  90  million  in  1921.  Upper  Silesian  output 
dropped  from  43  million  tons  in  1913  to  less  than  26  million 
in  1919,  and  totaled  29  million  in  1921.  For  all  regions 
now  German,  and  including  Upper  Silesia,  output  in  1913 
was  approximately  170  million  tons;  in  1919,  106  million 
tons  and  in  1921,  134  million  tons.  Lignite  production 
made  a  steady  growth  from  86  million  tons  in  1913  to 
121  million  tons  in  1921.  While  the  reduced  coal  output 
has  occasioned  severe  coal  shortages  in  Germany  and 
accounts  for  the  difficulty  had  in  making  deliveries  called 
for  by  the  treaty,  the  gradual  restoration  of  German  out- 
put will  place  Germany  in  a  fairly  satisfactory  position. 
Deliveries  to  the  allied  nations  are  essentially  of  the  nature 
of  exports.  The  loss  of  a  considerable  proportion  of  the 
Silesian  output  is  a  serious  handicap,  but  it  will  not  en- 
danger Germany's  industrial  future,  since  much  of  the 
Silesian  output  is  consumed  in  the  Silesian  and  Polish 
iron  and  steel  industries,  while  Germany's  iron  and  steel 
industry  is  dependent  on  and  is  located  in  close  proximity 
to  the  Ruhr  coal  fields  in  the  western  part  of  the 
country. 

Of  the  new  countries  of  Europe,  Poland  and  Czecho- 
slovakia alone  possess  important  coal  reserves.  Poland 


30  SOME  GREAT  COMMODITIES 

has  benefited  substantially  by  the  Upper  Silesian  parti- 
tion, and  in  the  future,  with  the  restoration  of  normal  out- 
put from  Polish  and  Silesian  mines,  it  may  become  a 
considerable  exporter  of  coal.  Prior  to  the  war,  the  nor- 
mal output  of  mines  in  territory  now  Polish  (exclusive  of 
Upper  Silesia)  was  about  9,000,000  gross  tons,  while  con- 
sumption approximated  19,000,000  gross  tons,  the  balance 
being  met  by  imports,  chiefly  from  Upper  Silesia.  The 
pre-war  output  of  the  section  of  Upper  Silesia  allotted  to 
Poland  was  over  32,000,000  tons.  Under  normal  con- 
ditions of  output,  therefore,  Poland  should  have  available 
a  total  supply  of  41,000,000  tons  against  total  domestic 
requirements  of  about  30,000,000  tons.  The  acquisition 
of  Silesian  mines,  moreover,  assures  the  Polish  iron  and 
steel  industry  a  supply  of  coking  coal  not  available  from 
domestic  mines. 

The  territory  now  included  in  Czechoslovakia  had  a 
pre-war  output  of  about  37  million  tons  of  which  14  millions 
were  coal  and  23  millions  were  lignite.  Its  output  of  coal 
was  below  domestic  requirements,  while  it  was  an  exporter 
of  lignite.  Its  1921  output  was  32  million  tons,  of  which 
21  millions  were  lignite. 

COAL  IMPORTING  COUNTRIES  OF  EUROPE 

Average  pre-war  consumption  of  coal  in  France,  the 
major  importing  country  of  Europe,  was  estimated  at 
about  61,000,000  gross  tons,  production  being  about 
40,000,000  tons.  The  remaining  21,000,000  tons  were 
imported,  principally  from  Great  Britain.  In  1913 
France's  actual  imports  were  18,416,000  tons,  of  which 
11,079,000  were  from  Great  Britain,  3,611,000  from  Bel- 
gium, and  3,436,000  from  Germany. 


COAL  31 

The  largest  coal  mines  of  France  are  located  in  the 
Valenciennes  Basin,  in  the  Departments  of  Nord  and 
Pas  de  Calais.  About  these  mines,  which  had  a  pre-war 
output  of  more  than  one-half  of  the  total  French  produc- 
tion, was  centered  the  iron  and  steel  industry  of  France. 
These  mines  were  destroyed  during  the  war  and  it  is 
estimated  that  their  restoration  to  their  former  level  of 
production  will  hardly  be  effected  before  1926.  Their 
output  in  1913  was  18,367,000  tons;  in  1919,  1,516,000 
tons  and  in  1921,  5,280,000  tons.  While,  by  the  terms  of 
the  Peace  Treaty,  France  has  received  Alsace-Lorraine  and 
the  Saar,  with  a  combined  production  for  1913  of  more 
than  17,000,000  tons,  the  consumption  of  these  districts 
almost  equaled  that  figure.  Saar  output,  moreover,  de- 
clined from  12,030,000  tons  in  1913  to  8,839,000  tons  in 
1919  and  9,669,000  tons  in  1921. 

These  various  factors  have  substantially  increased  the 
relative  volume  of  coal  in  comparison  with  total  require- 
ments which  France  must  import.  Exclusive  of  receipts 
from  the  Saar,  total  French  imports  of  coal  for  1920  were 
approximately  22  million  gross  tons,  of  which  12  million 
came  from  Great  Britain,  5  million  from  Germany  and 
3  million  from  the  United  States.  In  addition  France 
imported  4  million  tons  of  coke,  the  bulk  of  which  came 
from  Germany,  and  2  million  tons  of  fuel  briquettes,  from 
Germany,  Belgium  and  Great  Britain.  In  1921,  French 
imports  included  16  million  tons  of  coal,  3  million  of  coke, 
and  one  of  briquettes;  the  bulk  of  imports  coming  from 
Germany,  Great  Britain  and  Belgium,  in  the  order 
named. 

Belgium,  in  1913,  consumed  about  26  million  tons  of 
coal  and  produced  22  million  tons.  It  is  both  an  export- 


32  SOME  GREAT  COMMODITIES 

ing  and  an  importing  country,  shipping  coal  to  France, 
Italy  and  Luxemburg,  and  importing  it  from  Germany 
and,  to  a  less  extent,  from  Great  Britain.  For  1920,  its 
imports  totaled  2,244,000  tons  while  its  exports  aggre- 
gated 2,166,000  tons,  including  coke  in  equivalent  terms 
of  coal.  In  1921,  imports  totaled  6,238,000  tons  and  ex- 
ports 7,788,000  tons. 

The  Netherlands'  pre-war  production  was  about  one- 
fifth  of  its  requirements  of  approximately  10  million 
tons,  the  balance  of  which  was  supplied  by  Germany 
and  the  United  Kingdom.  The  difficulty  experienced 
in  getting  coal  during  the  war  led  to  the  development 
of  domestic  resources  by  which  production  was  raised 
from  two  million  tons  in  1913  to  four  million  in  1920. 
Substantial  quantities  of  coal  were  also  imported  from 
the  United  States  in  meeting  the  shortage.  For 
1920  total  imports  of  coal  (including  coke  in  terms 
of  coal)  aggregated  3,417,000  tons,  and  for  1921,  5,317,000 
tons. 

The  Scandinavian  countries,  aside  from  approximately 
400,000  tons  produced  in  Sweden,  rely  on  outside  sources 
for  their  coal.  Normally  the  bulk  of  it  is  gotten  from 
Great  Britain  in  return  for  iron  ore  and  timber.  The 
Scandinavian  countries  have  also  been  importers  of  Amer- 
ican coal  in  meeting  the  abnormal  shortage  of  recent  years. 
Thus,  in  1920,  American  coal  constituted  44  per  cent,  of 
Swedish  imports.  The  Mediterranean  countries — Spain, 
Italy,  Greece,  Egypt  and  Northern  Africa — normally  de- 
pend on  British  coal  but  have  become  purchasers  of  Amer- 
ican coal  during  and  since  the  war.  Spain  is  the  only 
one  of  the  group  which  produces  a  substantial  proportion 
cf  its  own  requirements. 


COAL  33 

THE  UNITED  STATES  IN  RELATION  TO 
THE  INTERNATIONAL  COAL  TRADE 

For  the  five  years  1910-14,  the  average  coal  output  of 
the  United  States,  including  anthracite,  was  467,128,000 
tons.  For  the  five  years  ending  June  30,  1914,  the  net  ex- 
ports, including  bunker  coal,  averaged  less  than  23,000,000 
tons  and  of  this  amount,  exports  to  Canada,  which  were 
not  essentially  different  from  the  domestic  trade,  ac- 
counted for  13,500,000  tons. 

These  figures  indicate  the  relative  unimportance  of  the 
pre-war  coal  exports  of  the  United  States  as  compared  with 
its  domestic  coal  trade.  The  development  of  the  Ameri- 
can export  trade  during  and  since  the  war  is  summarized 
in  Table  N.  From  a  pre-war  average  of  22,782,000  tons, 
exports  including  bunker  coal  gradually  increased  to 
32,232,000  tons  in  1917,  then  after  falling  off  during  1918 
and  1919,  jumped  to  47,450,000  tons  in  1920,  and  declined 
to  31,248,000  tons  in  1921.  The  bulk  of  the  increase  re- 
flected substantial  takings  by  the  countries  of  Europe 

TABLE  N— NET  EXPORTS  (TOTAL  EXPORTS  LESS  IMPORTS)  OF  COAL  FROM 
THE  UNITED  STATES,  1910  TO  19211 

Bituminous 

Bunker,  vessels 
Year  Exports  in  foreign  Anthracite          Total 

trade 
(in  thousands  of  gross  tons) 

1910-14  (5-yr.  aver.)..  12,234  7,020  3,528  22,782 

1915 15,245  7,471  3,537  26,253 

1916 17,471  7,826  4,160  29,457 

1917 19,997  6,883  5,352  32,232 

1918 18,656  5,532  4,402  28,590 

1919 17,057  7,343  4,369  28,769 

1920 33,292  9,362  4,796  47,450 

1921 19,532  7,548  4,168  31,248 

Average  relates  to  fiscal  years  ending  June  30;  other  years  are  calendar  years.      Period 
from  June  30, 1914,  to  January  1,  1915,  omitted. 


34  SOME  GREAT  COMMODITIES 

resulting  from  the  disorganization  of  their  normal  sources 
of  supply.  Other  countries,  also,  notably  those  in  South 
America,  increased  their  imports  of  American  coal  as 
British  supplies  were  curtailed. 

The  direction  of  exports  from  the  United  States,  as  well 
as  the  striking  increase  of  the  movement  of  American  coal 
to  European  and  other  coal-importing  countries  in  post- 
war years,  is  shown  in  detail  in  Table  O.  It  may  be  noted 
that,  substantial  as  was  the  increase  in  the  volume  of 
exports  in  1920  as  compared  with  the  pre-war  period,  ex- 
ports still  constituted  a  relatively  small  proportion  of  the 
total  American  production.  At  the  same  time,  when 
foreign  demand  is  concentrated  principally  on  the  rela- 
tively small  volume  of  "free"  (as  contrasted  with  con- 
tract) coal,  as  was  the  case  in  1920,  it  may  occasion  a 
rise  in  prices,  and  so  have  an  influence  on  the  entire  do- 
mestic situation  out  of  all  proportion  to  its  quantitative 
importance. 

In  view  of  the  over-development  of  American  mining 
capacity,  outlined  in  the  discussion  of  the  American 
domestic  coal  trade,  the  question  arises  as  to  the  future 
position  of  the  United  States  in  the  international  coal 
trade,  and  the  possible  utilization  of  surplus  capacity  in 
putting  coal  into  foreign  markets. 

It  is  generally  recognized  that  the  bulk  of  the  increase  in 
American  exports  during  recent  years  is  ©f  an  emergency 
character,  representing  purchases  in  the  United  States 
because  coal  could  not  be  had  elsewhere. 

There  are  a  number  of  factors  which  make  it  difficult 
to  put  American  coal  into  European  markets  permanently. 
Only  the  best  smokeless  coals  of  the  Appalachian  region 
meet  export  requirements.  These  coals  must  be  trans- 


COAL  35 


TABLE  O— EXPORTS  OF  COAL  FROM  THE  UNITED  STATES 
BY  COUNTRIES,  1910  TO  19211 

1910-14         1918          1919  1920          1921 

(5  yr.  aver.) 

(in  thousands  of  gross  tons) 

Bituminous: 
Countries  around  the  North  Sea — 


Denmark  

89 

967 

153 

Netherlands 

1 

17 

722 

2  147 

Norway  

1 

160 

736 

42 

Sweden  

253 

1,247 

67 

Remainder  of  Europe,  and 
Egypt— 
Eevot 

58 

38 

627 

476 

France                         .   . 

50 

7 

523 

3646 

608 

Greece                   .     ... 

3 

48 

231 

96 

Italy.              

357 

10 

1,633 

2388 

1  549 

Portugal       

2 

5 

45 

164 

100 

Spain  

23 

19 

66 

58 

Switzerland  

529 

812 

9 

South  America  — 
Argentina 

78 

179 

483 

1  718 

7^3 

Brazil 

185 

559 

634 

965 

527 

Chile 

58 

300 

94 

494 

151 

Uruguay 

21 

229 

195 

268 

88 

North  America  — 
Canada  

10,002 

16,191 

10,669 

14483 

11961 

Cuba  

1,051 

1,440 

971 

1333 

525 

Mexico  

469 

163 

102 

203 

172 

Countries    not     specified 
above  . 

1394 

853 

752 

1620 

2QfiO 

Total 

13750 

19956 

17959 

34390 

206^3 

Bunker,  vessels  in  foreign 
trade.  . 

7.020 

5.532 

7.343 

9.362 

7.548 

Total  bituminous 20,770  25,488  25,302  43,752    28,201 

Anthracite: 

Canada 3,470  4,379  4,345  4,436      4,035 

Other  countries 63  57  98  389         141 

Total  anthracite 3,533  4,436  4,443  4,825      4,176 

Grand  total 24,303  29,924  29,745  48,577    32,377 

» Average  relates  to  fiscal  years  ending  June  30;  other  years  are  calendar  years. 
»Less  than  1,000  tons. 


36  SOME  GREAT  COMMODITIES 

ported  by  rail  for  200  miles  or  more  before  they  reach 
tidewater.  British  export  coals  are  within  15  miles  of  the 
sea.  After  reaching  tidewater,  American  coals  have  to 
bear  ocean  transportation  charges  across  the  Atlantic, 
while  the  United  Kingdom  and  Germany  are  adjacent 
to  the  principal  European  markets.  Moreover,  the  bal- 
ance of  ocean  freights  between  America  and  Europe  is 
decidedly  against  the  United  States.  This  country  im- 
ports manufactured  goods  from  Europe,  and  exports  bulky 
raw  materials,  such  as  cotton  and  grain,  and  heavy  iron 
and  steel  products.  Great  Britain,  on  the  other  hand, 
imports  bulk  commodities  and  utilizes  coal  as  outward 
ballast.  The  same  in  less  degree  is  true  of  Germany. 
These  factors  made  it  impracticable  to  market  American 
coal  in  Europe  in  substantial  quantities  prior  to  the 
war,  and  they  will  become  increasingly  effective  as 
normal  conditions  of  coal  production  are  restored  in 
Europe. 

The  situation  is  somewhat  different  with  respect  to 
Central  and  South  American  countries.  There,  the 
physical  balance  of  freights  is  more  favorable  to  the 
United  States.  The  same  is  true  of  the  distance  which 
the  coal  must  be  shipped,  particularly  as  respects  the 
countries  in  the  Caribbean  and  on  the  west  coast  of  South 
America.  Prior  to  the  war  the  bulk  of  American  sea- 
borne coal  exports  went  to  the  Caribbean  region,  and  this 
trade  did  not  differ  essentially  from  the  local  coastwise 
shipments  in  the  domestic  coal  trade. 

While  the  United  States  is  in  a  position  to  compete  for 
the  South  American  coal  trade  on  a  permanent  basis,  that 
trade  cannot  comprise  any  considerable  volume.  The 
tropical  climate  of  much  of  the  country,  its  small  popula- 


COAL  37 

tion,  and  the  limited  extent  of  industrial  development 
make  the  present  South  American  requirements  small. 

The  conclusion  seems  inevitable  that,  apart  from  the 
provision  of  fuel  to  Canada,  the  foreign  coal  trade  of  the 
United  States  will  not  become  of  great  importance.  The 
United  States  is  too  far  distant  from  the  great  coal- 
consuming  markets.  Probably  its  exports  to  Europe  will 
continue  permanently  on  a  level  considerably  above  the 
pre-war  figure;  nevertheless,  they  can  hardly  form  more 
than  a  very  small  proportion  either  of  Europe's  require- 
ments or  of  American  production. 

This  is,  on  the  whole,  highly  desirable.  It  is  not  eco- 
nomical to  move  so  bulky  a  commodity  as  coal  to  support 
industries  at  distant  points.  The  tendency  is  strongly 
in  the  direction  of  locating  the  industry  where  power  is 
readily  available.  In  Europe  coal  shortage  has  hastened 
and  will  continue  to  stimulate  the  development  of  water 
power.  The  industrial  development  of  the  United  States 
has  by  no  means  reached  its  completion,  and  available 
resources  are  not  at  all  excessive  in  comparison  with 
future  requirements.  For  this  country,  the  export  of 
coal  in  the  shape  of  finished  goods  rather  than  in  raw  state 
constitutes  the  sounder  industrial  development. 


COTTON 

THE  cotton  trade  is  essentially  international.  Raw 
cotton  forms  the  chief  item  both  of  American  ex- 
ports and  British  imports.  Before  the  war,  also, 
it  was  the  principal  article  imported  into  Germany  and 
Japan  and  was  among  the  leading  imports  into  France, 
Belgium,  and  other  important  industrial  countries.  Cot- 
ton manufactures,  moreover,  regularly  are  the  principal 
export  from  the  United  Kingdom  and  the  chief  import 
into  India,  China,  Turkey,  the  Dutch  East  Indies  and 
many  other  countries  having  little  industrial  develop- 
ment. 

In  the  years  just  before  the  war  about  12,000,000  bales 
of  raw  cotton,  or  more  than  one-half  of  the  total  annual 
crop  of  22,000,000  bales,  were  exported  from  the  cotton- 
growing  countries,  thus  enabling  the  countries  of  western 
Europe,  Canada  and  Japan,  although  they  did  not  grow 
any  appreciable  amount  of  cotton,  to  count  cotton  manu- 
facturing among  their  chief  manufacturing  industries.  In 
addition,  out  of  a  total  world  production  of  36,000,000,000 
yards  the  annual  exports  of  cotton  piece  goods  were 
10,000,000,000  yards,  while  large  quantities  of  yarn,  thread, 
wearing  apparel  and  other  cotton  manufactures  also  passed 
into  international  trade. 

Exports  of  raw  cotton  were  greatly  curtailed  after  the 
war  by  unsettled  conditions  in  Europe.  Nevertheless, 
over  6,600,000  bales  of  raw  cotton  were  exported  from  the 

38 


COTTON  39 

United  States  in  1921.  This  amount  compares,  how- 
ever, with  an  annual  average  of  nearly  9,000,000  bales  in 
the  period  from  1909  to  1913. 

The  United  Kingdom  has  long  played  a  leading  part  in 
the  world's  cotton  trade.  Obtaining  the  raw  material 
chiefly  from  the  American  surplus,  the  British  manufac- 
ture cotton  goods  to  an  amount  second  only  to  the  Amer- 
ican output,  and  consume  so  little  that  before  the  war  the 
United  Kingdom  exported  6,700,000,000  yards  of  piece 
goods  as  compared  with  only  400,000,000  yards  exported 
by  the  United  States,  its  nearest  competitor.  Imports 
of  raw  cotton  into  the  United  Kingdom  in  1921  amounted 
to  2,300,000  bales,  of  which  1,600,000  came  from  the 
United  States,  whereas  in  the  five  years  from  1909  to  1913 
the  imports  averaged  4,500,000  bales  a  year,  of  which 
3,400,000  were  bought  from  the  United  States. 

Though  India  and  Egypt,  the  second  and  third  largest 
cotton  producers,  are  both  British  possessions,  they  to- 
gether supplied  only  a  little  over  a  fifth  of  the  needs  of 
the  United  Kingdom  both  before  the  war  and  in  1921. 
The  British,  therefore,  to  assure  themselves  of  adequate 
supplies,  have  been  trying  diligently  to  develop  cotton- 
producing  areas  elsewhere  among  their  possessions  as  well 
as  to  increase  the  yield  and  improve  the  quality  of  the 
crops  in  the  regions  already  growing  cotton  within  the 
Empire. 

Cotton  has  been  known  to  western  Europe  since  Alex- 
ander the  Great  introduced  it  from  India,  but  it  did  not 
become  a  leading  textile  manufacture  there  until  about 
the  middle  of  the  eighteenth  century.  Prior  to  this  the 
world  relied  upon  the  primitive  methods  copied  from  the 
Hindus  and  had,  in  fact,  imported  much  of  its  cloth  from 


40  SOME  GREAT  COMMODITIES 

India.  After  the  invention  of  the  fly-shuttle  and  the 
spinning-jenny  cotton  rapidly  replaced  wool  as  the  chief 
English  textile.  Cotton  had  been  discovered  growing  in 
the  West  Indies  and  on  the  mainland  of  America  by 
Columbus  and  his  followers,  and  the  British  turned  to  the 
New  World  rather  than  to  the  Old  for  their  supplies.  It 
has  been  estimated  that  near  the  close  of  the  eighteenth 
century  the  West  Indies  furnished  about  70  per  cent,  of 
the  British  supply,  the  Mediterranean  countries  20  per 
cent.,  and  Brazil  8  per  cent.  The  quantity  contributed 
by  the  United  States  and  India  was  less  than  I  per  cent, 
and  Egypt  furnished  none. 

PRINCIPAL  PRODUCING  COUNTRIES 

Cotton  production  is  limited  to  warm  climates,  where 
ample  moisture  is  assured  either  by  rainfall  or  irrigation, 
but  where  there  is  little  danger  of  excessive  rain  or  early 
frosts.  Average  pre-war  crops  of  the  chief  cotton-growing 
countries,  according  to  the  best  estimates  available,  to- 
gether with  estimates  of  the  crops  for  each  year  from  1915 
to  1921  are  shown  in  Table  A.  Chinese  production  as 
indicated  in  the  table  refers  to  the  amount  of  the  spinning- 
mill  consumption  plus  net  exports,  for  although  it  is  known 
that  the  crop  greatly  exceeds  this  amount  there  are  no 
satisfactory  data  as  to  the  total  crop  or  the  consumption  of 
cotton  in  Chinese  homes.  The  latest  estimate  of  the 
Chinese  Ministry  of  Agriculture  was  that  in  1916  the  crop 
amounted  to  5,200,000  bales.  Comparatively  little  of  this 
cotton,  however,  became  available  to  commerce. 

There  has  been  a  considerable  falling  off  in  cotton  pro- 
duction in  recent  years,  but  although  the  world  crop  in 
1921  was  approximately  15,000,000  bales  as  compared 


COTTON  41 

with  22,000,000  before  the  war,  the  decline  was  largely 
offset  by  the  stocks  of  raw  cotton  that  had  accumulated 
during  the  war. 

In  addition  to  the  quantities  shown  in  Table  A  the 
United  States  produced  an  average  of  612,000  bales  of 
linters  from  1910  to  1914,  and  441,000  bales  in  1920, 
while  in  1921  the  output  was  398,000.  "Linters"  is  the 
term  applied  to  the  short  fibers  which  adhere  to  the  seed 


TABLE  A— COTTON  PRODUCTION  BY  PRINCIPAL  COUNTRIES 


Country 


1910-14       1915 
(5-yr.  aver.) 


1916       1917        1918       1919       1920 
(in  thousands  of  500-lb.  bales) 


1921 


United  States  .  .  . 

14,259 

11,192 

11,450 

11,302 

12,041 

11,421 

13,440 

7,954 

British  India  

3,524 

2,990 

3,602 

3,200 

3,182 

4,637 

2,845 

3,623 

Egypt  

1,513 

989 

1,049 

1,304 

999 

1,155 

1,251 

684 

Russia  

1,023 

1,465 

1,065 

578 

550 

420 

80 

50 

Chinai  

694 

845 

810 

830 

900 

1,100 

1,000 

1,650 

Brazil  

346 

250 

309 

400 

524 

536 

430 

560 

Mexico  

138 

125 

140 

125 

130 

200 

205 

165 

Persia  

128 

130 

i 

2 

i 

t 

I 

t 

Turkey  

119 

100 

s 

I 

a 

t 

t 

i 

Peru..  

104 

93 

108 

110 

114 

165 

150 

146 

Chosen  

85 

126 

126 

182 

206 

* 

i 

t 

Uganda  

21 

20 

20 

19 

18 

28 

42 

65 

Other  countries  .  . 

144 

204 

304 

199 

201 

432 

328 

310 

Total 22,098      18,529     18,983     18,249     18,865    20,094     19,771     15,207 

^Commercial  crop  only. 
•Not  available. 

of  the  American  upland  and  Indian  varieties  of  cotton 
after  it  has  been  through  the  gins.  These  fibers  are  re- 
moved from  the  seed  as  a  step  preliminary  to  crushing  the 
seed.  They  are  of  comparatively  small  value,  being  used 
chiefly  for  stuffing  mattresses,  horse  collars,  etc.  During 
the  war  this  cotton  was  in  great  demand  also  for  the  manu- 
facturing of  guncotton. 

The  growth  of  cotton  as  a  cultivated  crop  in  the  United 
States  is  first  reported  as  in  Virginia  in  1621  and  in  South 
Carolina  and  Georgia  over  a  century  later.  The  first 
exports  to  England  were  recorded  in  1739  but  until  Eli 


42  SOME  GREAT  COMMODITIES 

Whitney  invented  the  cotton-gin  in  1793  more  was  im- 
ported than  exported. 

Production  in  the  United  States  amounted  to  3,138 
bales  of  500  pounds  each  in  1790,  to  6,276  bales  in  1792, 
to  10,460  in  1793,  and  to  16,736  in  1794.  By  1835  it 
had  grown  to  1,000,000  bales;  in  1879  it  reached  5,000,000 
bales;  and  in  1894,  10,000,000  bales.  From  about  this 
time  the  American  crop  was  hindered  by  the  boll  weevil 
which  invaded  the  cotton  belt  from  Mexico  in  1890.  Year 
by  year  this  pest  has  extended  its  activities  until  now  it 
has  infested  practically  the  entire  belt  and  has  done  great 
damage  to  the  crops.  Nevertheless,  the  record  crop  of 
16,135,000  bales  was  grown  in  1914,  when  the  weevil  had 
infested  nearly  one-half  of  the  cotton  belt.  Means  for 
fighting  the  boll  weevil  have  been  developed,  but  they 
involve  the  use  of  more  labor  and  materials  than  prior 
to  the  invasion. 

Cotton  was  the  third  most  valuable  American  crop  in 
1921,  having  an  estimated  total  value,  including  the  value 
of  the  seed,  of  $783,000,000  and  ranking  only  after  corn 
and  hay.  Texas,  with  its  large  acreage  and  favorable 
climate,  is  the  leading  cotton  state.  In  1921  it  was  esti- 
mated to  have  produced  2,200,000  bales  or  over  a  quarter 
of  the  total  crop.  Mississippi  with  a  production  of  870,000 
bales,  Arkansas  with  an  86o,ooo-bale  crop,  Georgia  with 
840,000  bales,  North  Carolina  with  800,000  bales,  South 
Carolina  with  760,000  bales,  and  Alabama  with  635,000 
bales  were  the  other  principal  cotton-growing  states. 

VARIETIES  OF  COTTON 

The  relative  quality  of  the  various  kinds  of  cotton  grown 
in  the  different  countries  in  1920  is  shown  in  Table  B, 


COTTON  43 

together  with  the  approximate  yield  of  each  kind.  The 
classification  is  based  upon  the  length  of  staple,  and  ranges 
from  Grade  I,  which  has  a  staple  of  two  inches  or  over, 
to  Grade  V,  which  has  a  staple  of  one  inch  or  less.  It 


TABLE  B — WORLD'S  COTTON  CROP  IN  1920  ACCORDING  TO  GRADES 


Quality  and  grade 
I.    Best  Sea  Island 


II.    Best  Egyptian  (Sakel,  etc.) 
American-Egyptian 
Sea  Island 


III.  Egyptian 
Peruvian 
Long  Staple  American 


IV.    American  Upland,  etc. 


Length  of 

staple  Where  grown 

(in  inches) 

2  and  over    West  Indies 

Islands  of  South  Carolina 

Total 


Egypt 

Arizona  and  California 
West  Indies 
Florida  and  Georgia 

Total 


V.    Indian,  etc. 


iLess  than  1,000  bales. 


Mississippi  Delta,  etc. 
British  East,  Central  and 

South  Africa 
Sudan 


Total 


United  States 

Brazil 

India 

Mexico 

China  and  Chosen 

Turkey  and  Persia 

Russia 

British  West  Africa 


India 
China 
Russia 


Total 


Total 
Grand  total 


Crops  (in 
thousands  of 
500-lb.  bales) 


550 

92 

2 

645 

701 
150 
112 

46 
18 

1,027 

13,235 

430 

235 

205 

200 

87 

32 

13 

14,437 

2,610 
1,000 


3,658 
19,771 


will  be  noted  that  the  bulk  of  the  world's  cotton  falls 
within  Grade  IV,  which  has  a  staple  of  from  |  of  an  inch 
to  ij  inches. 

Especial  value  is  attached  to  long-staple  cotton  because 


44  SOME  GREAT  COMMODITIES 

of  its  use  in  the  manufacture  of  automobile  tires,  thread, 
and  the  higher  grade  fabrics.  The  best  of  this  kind  of 
cotton  is  that  grown  on  the  islands  off  Charleston,  South 
Carolina,  and  also  in  the  West  Indies.  Next  come  the 
Sea  Island  cotton  grown  in  Florida  and  Georgia  and  the 
best  Egyptian  grades.  As  late  as  1917  the  United  States 
produced  71,980  bales  of  Sea  Island  cotton.  Unfortu- 
nately, as  this  cotton  matures  late,  it  is  particularly  vul- 
nerable to  the  attacks  of  the  boll  weevil.  In  1918  this 
pest  had  so  penetrated  into  the  territory  where  Sea  Island 
is  grown  that  the  crop  was  reduced  to  40,900  bales.  In 
1919  it  had  fallen  to  5,020  bales  and  in  1920  to  1,440 
bales. 

A  variety  of  long-staple  upland  cotton  called  Meade 
cotton  closely  resembles  Sea  Island  but  since  it  matures 
two  or  three  weeks  earlier  it  is  not  so  liable  to  the  ravages 
of  the  boll  weevil.  It  was  developed  during  1912  and  is 
reported  as  now  established  on  a  commercial  basis. 

Another  long-staple  variety  of  cotton  grown  in  the 
United  States  is  the  American-Egyptian  cotton  grown  on 
irrigated  land  in  Arizona  and  southern  California.  In 
1912  the  seed  of  this  cotton  was  distributed  to  a  number 
of  farmers  by  the  United  States  Department  of  Agricul- 
ture. The  crop  amounted  to  375  bales  of  500  pounds 
each.  By  1917  the  crop  had  grown  to  15,966  bales,  in 
1918  to  40,343  bales,  in  1919  to  42,374  bales,  and  in  1920 
to  91,965  bales,  but  in  1921  this  crop  was  reduced  to  less 
than  40,000  bales. 

The  bulk  of  the  American  long-staple  cotton  is  of  the 
upland  variety  and  is  grown  chiefly  in  the  Mississippi 
Delta,  Arkansas,  Texas,  Oklahoma,  and  South  Carolina. 
In  1920  the  upland  crop  having  a  staple  of  over  I J  inches 


COTTON  45 

amounted  to  112,000  bales,  while  1,112,000  bales  had  a 
staple  of  from  i|  to  ij  inches. 

Of  the  total  cotton  crop  in  the  United  States  in  1920, 
however,  12,123,000  bales  or  90  per  cent,  had  a  staple  of 
less  than  ij  inches. 

PRINCIPAL  EXPORTING  COUNTRIES 

Exports  of  cotton  are  naturally  made  chiefly  by  the  lead- 
ing cotton-growing  countries.  Table  C  shows  the  net 
exports,  that  is,  the  total  exports  minus  the  total  imports, 
of  cotton  from  the  principal  exporting  countries  in  the 
five  years  from  1909  to  1913,  in  1919,  1920  and  1921. 

TABLE  C— NET  EXPORTS  OF  COTTON  FROM  THE  PRINCIPAL  EXPORTING 

COUNTRIES 

~  1909-13  1919  1920  1921 

«"*ry  (5_     aver } 

(in  thousands  of  500-lb.  bales) 

United  States..  *8,622  26,365  25,734  26,322 

British  India 1,820  1,443  1,937  2,010 

Egypt 1,382  1,329  793  949 

China 188  222  •  * 

Persia 104  4  4  * 

Peru 83  175  *  « 

Brazil 79  54  109  86 

Dutch  East  Indies 36  13  4  4 

Uganda 15  24  38  65 

Including  linters. 

2Excluding  linters. 

"Net  imports  of  81,000  bales  reported. 

«Not  available. 

The  United  States,  British  India,  China  and  Brazil 
have  considerable  textile  industries  of  their  own,  but  the 
other  exporting  countries,  Egypt,  Persia,  Peru,  the  Dutch 
East  Indies  and  Uganda  manufacture  little  or  no  cotton 
goods.  Although  there  has  been  a  tendency  in  recent 
years  for  cotton  to  be  increasingly  manufactured  in  the 


46  SOME  GREAT  COMMODITIES 

cotton-growing  countries,  the  main  reason  for  the  decrease 
in  the  amounts  exported  was  the  falling  off  of  buying  by 
the  European  industrial  countries  which  furnished  the 
chief  markets  for  raw  cotton.  Large  stocks  were  left  on 
hand  in  all  the  important  producing  countries. 

The  importance  of  export  trade  to  the  American  cotton 
market  is  shown  by  the  fact  that  prior  to  the  war  60  per 
cent,  of  the  crop  was  exported,  only  40  per  cent,  being  used 
at  home.  The  destination  of  the  shipments  of  raw  cotton 
from  the  United  States  is  shown  in  Table  D  for  the  five 
years  from  1910  to  1914  and  for  1919,  1920  and  1921. 

TABLE  D— EXPORTS  OF  COTTON  FROM  THE  UNITED  STATES  BY  COUNTRIESI 


Country 


«1920 


'1910-14  «1919 

(5-yr.  aver.) 

(in  500-lb.  bales) 


"1921 


United  Kingdom  

.  .  .  .     3,509,424 

3,238,178 

2,607,793 

1,698,337 

Germany  

.  .  .  .     2,514,949 

155,829 

752,143 

1,566,651 

France  

....     1,086,620 

796,338 

668,921 

668,457 

Italy  

500,776 

561,700 

565,703 

557,652 

Japan  

296,575 

881,041 

671,869 

1,121,224 

Spain  

269,864 

252,152 

290,055 

279,203 

Belgium  

183,783 

163,789 

201,811 

193,766 

Canada  

153,418 

166,811 

220,658 

176,721 

Austria-Hungary  

96,401 

97,219 

419,217 

43,598 

Russia  

87,577 

310 

. 

Sweden  

36,285 

86,198 

88,111 

46,707 

Netherlands  

24,356 

210,522 

88,916 

95,288 

Mexico  

21,202 

692 

47,940 

27,598 

Portugal  

14,180 

24,957 

13,635 

26,601 

China  

13,369 

11,628 

11,379 

154,571 

Other  countries  

30,825 

87,992 

110,476 

61,852 

Total 8,839,604    6,735,356    6,358,627    6,678,227 

figures  are  for  all  domestic  raw  cotton  exported,  including  linters. 

'Fiscal  years  ending  June  30. 

^Calendar  year. 

including  exports  to  Austria,  Czechoslovakia,  Jugoslavia,  Albania  and  Fiume. 

Of  the  American  exports  before  the  war  the  United 
Kingdom  took  40  per  cent.,  Germany  28  per  cent.,  France 
12  per  cent.,  Italy  6  per  cent.,  Japan  3  per  cent,  and  the 


COTTON  47 

remaining  countries  n  per  cent.  Because  of  decreased 
purchases  by  the  three  leading  customers  the  annual  ex- 
ports since  the  war  have  been  over  2,000,000  bales  less 
than  the  average  before  the  war.  In  1921  the  distribution 
was:  the  United  Kingdom  25  per  cent.,  Germany  23  per 
cent.,  France  10  per  cent.,  Italy  8  per  cent.,  Japan  17 
per  cent,  and  other  countries  17  per  cent.  Except  for 
the  United  Kingdom,  Germany  and  France,  the  cotton  ex- 
ports to  most  countries  have  been  greater  since  than  be- 
fore the  war,  the  increase  in  exports  to  Japan  and  China 
in  1921  being  especially  noteworthy. 

India,  the  second  largest  grower  of  cotton,  exported 
56  per  cent,  of  its  crop  before  the  war,  41  per  cent,  in  the 
year  beginning  April  i,  1919,  58  per  cent,  in  1920  and  66 
per  cent,  in  1921. 

Forty-two  per  cent,  of  the  average  pre-war  exports  went 
to  Japan,  69  per  cent,  in  the  fiscal  year  1919-20,  45  per 
cent,  in  the  fiscal  year  1920-21  and  59  per  cent,  in  the  year 
beginning  April  I,  1921.  The  rest  of  the  exports  were  sent 
principally  to  European  countries,  none  of  which  took  a 
very  large  amount.  Germany,  the  second  best  customer 
in  the  years  from  1910  to  1914,  bought  an  average  of  only 
280,012  bales.  Exports  to  the  chief  European  countries 
buying  Indian  cotton  were  considerably  below  the  pre-war 
averages  in  1921-22,  but  exports  to  Japan  and  China 
showed  remarkable  gains. 

Table  E  shows  the  exports  of  cotton  from  India  in  the 
five  fiscal  years  1909  to  1913  and  in  the  fiscal  years  1919, 
1920  and  1921,  by  countries  of  destination.  About  three- 
fourths  of  the  shipments  were  from  Bombay. 

The  quantities  of  cotton  exported  by  Egypt  in  the  five 
seasons  from  1909-10  to  1913-14  and  in  the  seasons 


48 


SOME  GREAT  COMMODITIES 


TABLE  E— EXPORTS  OF  COTTON  FROM  BRITISH  INDIA  BY  FISCAL  YEARS 
BEGINNING  APRIL  1 


Country 
Taoan 

1909-13 
(5-yr.  aver.) 

890678 

1919 
(in  500-lb. 
1  325  852 

1920 
bales) 
751  211 

1921 

1  408  212 

Germany  

280,012 

38886 

161096 

187  793 

Belgium  

221,329 

109,948 

194  333 

158  641 

Italy 

185  679 

124  154 

170  312 

123  514 

Austria-Hungary 

134  162 

7047 

27319 

26  781 

United  Kingdom 

99885 

119231 

76805 

28627 

France   

95,953 

45754 

30,764 

45347 

Spain   

31,671 

34,644 

61,264 

24  134 

China  

24,126 

72,182 

153,427 

348  356 

United  States     . 

6568 

14  197 

7504 

7343 

Netherlands 

4713 

12096 

9453 

4292 

Other  countries  

32,032 

14,927 

16,733 

28,393 

Total.. 

1,925.808 

1,918,918    1 

.660.221 

2.391.433 

1918-19,  1919-20  and  1920-21  are  shown  by  countries  in 
Table  F. 

The  United  Kingdom  took  44  per  cent,  of  the  exports 
before  the  war,  47  per  cent,  in  1919—20  and  50  per  cent, 
in  1920-21.  Exports  to  the  United  States  grew  from  12 
per  cent,  of  the  total  in  the  pre-war  period  to  35  per  cent, 
in  1919-20,  but  in  1920-21  declined  to  12  per  cent,  again. 
This  cotton  is  used  in  the  United  States  to  supplement  the 
domestic  supply  of  long  staple.  Its  chief  use  is  in  the 
manufacture  of  automobile  tires. 

As  its  cotton  is  of  high  grade  Egypt,  although  a  large 
purchaser  of  cotton  goods,  uses  little  of  its  own  cotton. 
Practically  all  of  it  is  exported,  Alexandria  being  the  port 
of  shipment.  Because  of  the  falling  off  in  this  interna- 
tional demand,  however,  Egypt  was  able  to  export  only 
a  little  over  one-half  of  its  1920  crop  in  1920-21.  The 
business  depression  thus  brought  about  emphasized  the 
necessity  of  having  more  than  one  crop  to  rely  on.  Con- 
sequently, while  the  British  Empire  Cotton  Growing  Com- 


COTTON 


49 


mittee  is  making  every  effort  to  increase  the  supply  of 
cotton  grown  within  the  Empire,  Egyptian  government 
regulations  have  been  issued  restricting  the  three  crops 
from  1921  to  1923  so  that  no  more  than  a  third  of  the  area 
of  each  holding  may  be  planted  with  cotton.  It  was 
estimated  that  this  restriction  of  acreage  would  reduce 
the  crop  by  about  a  quarter.  That  the  1921  crop  was  45 
per  cent,  less  than  in  1920  was  due  to  decreased  use  of 
fertilizer,  activities  of  the  pink  boll  worm,  and  other  ad- 
verse conditions,  as  well  as  to  reduced  acreage. 

TABLE  F — EXPORTS  OF  COTTON  FROM  EGYPT  BY  SEASONS  ENDING 
AUGUST  31 


Country 
United  Kingdom  

1910-14 
(5-yr.  aver.) 

605,958 

1919 
(500-lb. 

691,500 

1920 
bales) 
520,201 

1921 
335,831 

United  States  

160,854 

143,274 

385,859 

77,050 

Austria  , 

151,340 

19,779 

France  , 

133,905 

118,044 

75,334 

62,141 

Russia  

108,402 

Italy.  . 

87,499 

74,189 

78,375 

32,655 

Spain 

29,904 

15,696 

13,242 

22065 

Netherlands. 

28,932 

15 

2,769 

1,178 

Japan 

27,400 

33,329 

21,441 

28,104 

Germany  

26,755 

8,834 

41,142 

Other  countries  

10,990  ' 

4,290 

3,682 

59,959 

Total.. 

1.371.939 

1.080.337 

1.109.737 

669.904 

^Including  4,294  bales  to  Czechoslovakia. 


UNITED    KINGDOM    LEADING    IMPORTER 

Table  G  shows  the  net  imports  of  cotton,  that  is,  the 
total  imports  minus  the  total  exports,  into  the  principal 
importing  countries  before  the  war  and  in  1919,  1920  and 
1921 .  The  United  Kingdom  was  by  far  the  leading  importer 
until  1921.  Germany  ranked  second  in  the  pre-war  period, 
with  Japan  third,  France  fourth  and  Italy  fifth.  In  1921 


50  SOME  GREAT  COMMODITIES 

Japan  was  the  leading  importer.  This  change  from  the 
pre-war  position  was  due  to  a  decrease  of  49  per  cent,  in 
the  net  imports  into  the  United  Kingdom  as  well  as  a  gain 
of  72  per  cent,  in  Japanese  gross  imports. 

TABLE  G — NET  IMPORTS  OF  COTTON  INTO  THE  PRINCIPAL  IMPORTING 

COUNTRIES 

1909-13  1919  1920  1921 

Country  (5-yr.  aver.) 

(in  thousands  of  500-lb.  bales) 

United  Kingdom..  3,981  3,674  3,295  2,043 

Germany 1,812  611  1,370 

Japan 1,333  2,068  2,028  2,295 

France 1,074  885  892  781 

Italy 856  788  788  696 

Austria 854  1  3325  "505 

Russia 847  *  *  l 

Spain..  365  325  355  372 

Belgium 221  227  447  190 

Canada 150  171  230  174 

Netherlands 126  104  110  113 

Switzerland 108  110  93  109 

Sweden....  88  71  104  56 

Portugal 75  33  !  l 

Finland 35  28  29  32 

Denmark 25  30  21  16 

Norway..  16  21  11  7 

Poland l  1  101  152 

*Not  available. 
''Gross  imports. 
'Including  Austria  and  Czechoslovakia. 

Three-quarters  of  the  cotton  imported  into  the  United 
Kingdom  from  1909  to  1913  was  bought  from  the  United 
States.  Egypt,  British  India,  Brazil,  Peru  and  British  East 
Africa  came  next  in  the  order  named.  Table  H  shows, 
by  countries,  the  quantities  of  cotton  imported  into  and 
reexport ed  from  the  United  Kingdom  from  1909  to  1913 
and  in  1919,  1920  and  1921.  The  figures  for  1920  and 
1921  are  not  strictly  comparable  with  those  for  previous 
years  because  of  a  change  in  classification  so  that  in  those 


COTTON  51 

years  linters  and  cotton  waste  were  excluded  from  the  cot- 
ton item.  On  the  old  basis  the  total  imports  for  1921  were 
2,407,166  bales,  while  the  net  imports  were  2,094,134 
bales. 


TABLE  H— RAW  COTTON  TRADE  OF  THE  UNITED  KINGDOM 


Item  and  country 


1909-13 
(5-yr.  aver). 


Imports 

United  States 3,417,058 

Egypt...., 799,633 


British  India 

Brazil 

Peru 

British  East  Africa.. 
British  West  Africa. 
British  West  Indies. 
Other  countries . . 


148,445 
60,300 
53,017 
16,062 
8,061 
5,453 
31,454 
Total  imports 4,539,483 


Reexports 

Russia 

United  States 

Belgium 

British  India 

Germany 

Portugal 

Sweden 

France 

Other  countries .... 
Total  reexports 


207,440 

186,109 

40,870 

28,866 

21,150 

16,268 

19,783 

10,039 

28,419 

558,944 


1919 

U920 

(in  500-lb.  bales) 

2,741,481 

2,780,667 

842,740 

575,408 

127,207 

148,435 

10,261 

46,336 

92,971 

130,606 

19,965 

30,888 

12,329 

12,982 

4,023 

5,016 

65,596 

64,107 

3,916,573 

3,794,445 

18,555 

41,084 

104,656 

209,035 

12,936 

25,373 

1,444 

14,666 

72,022 

6,395 

11,757 

4,748 

11,375 

35,019 

53,572 

45,288 

73,683 

242,263 

499,345 

U921 


1,602,005 

2462,583 

330,130 

32,692 


69,422 
14,250 

4 

44,315 

16,144 

10,065 

6,359 

141,340 

301,895 


Net  imports 3,980,539    3,674,310    3,295,100    2,043,209 

^Exclusive  of  linters  and  waste. 

•Exclusive  of  imports  from  Anglo-Egyptian  Sudan. 

•Including  small  shipments  from  Ceylon  and  elsewhere  in  British  East  Indies. 

•Not  reported  separately;  included  in  "Other  countries." 


Germany,  like  the  United  Kingdom,  took  by  far  the 
larger  part  of  its  supply  of  raw  cotton  from  the  United 
States  before  the  war.  In  the  five-year  period  from  1909 
to  1913  the  imports  from  America  were  77  per  cent,  of 
the  total.  British  India  was  the  next  leading  source,  while 


52  SOME  GREAT  COMMODITIES 

Egypt  and  China  ranked  third  and  fourth  respectively. 
The  average  annual  imports  into  Germany  from  1909  to 
1913  and  the  average  reexports  for  the  same  period  are 
shown  by  countries  in  Table  I.  Details  for  later  years 
are  lacking,  but  in  1920  total  raw  cotton  imports  amounted 
to  614,000  bales  and  reexports  to  3,000  bales,  and  in  1921 
imports  were  1,433,000  bales  and  reexports  73,000  bales. 

TABLE  I— RAW  COTTON  TRADE  OF  GERMANY 

1909-13 
Item  and  country  (5-yr.  aver.) 

(in  500-lb.  bales) 
Imports 

United  States 1,550,285 

British  India 261,328 

Egypt 172,144 

China 11,170 

Dutch  East  Indies 5,504 

Turkey 4,301 

Other  countries 12,294 

Total  imports. 2,017,026 

Reexports 

Austria-Hungary 95,744 

Russia 51,810 

Netherlands 16,451 

Switzerland 12,574 

Italy 8,248 

Denmark 4,944 

Other  countries 15,088 

Total  reexports 204,859 

Net  imports 1,812,167 

Table  J,  which  gives  the  imports  of  raw  cotton  into 
Japan  by  countries  of  shipment  for  the  years  from  1909 
to  1913  and  for  1919,  1920,  1921,  shows  that  although 
British  India  holds  the  chief  place  as  a  source  for  Japan's 
raw  cotton,  the  cotton  bought  from  the  United  States  is 
of  increasing  importance.  For  the  average  of  the  pre-war 
years  India  furnished  60  per  cent,  of  the  total  cotton  im- 
ports and  the  United  States  22  per  cent.  In  1921,  how- 


COTTON 


53 


ever,  51  per  cent,  came  from  India  while  40  per  cent,  was 
imported  from  America.  Reexports  of  raw  cotton  have 
grown  remarkably,  but  they  still  constitute  only  a  small 
part  of  the  total  imports. 

TABLE  J— RAW  COTTON  TRADE  OF  JAPAN1 


Country 
British  India  .  . 

1909-13 
(5-yr.  aver.) 

794,584 

1919 

945,180 

*1920 
(in  500-lb.  bales] 
1,109,761 

'1921 
\ 
1,165,815 

United  States  

290,419 

823,798 

866,007 

922,273 

China         .    . 

194,014 

261,937 

53,831 

148,278 

Egvot 

27,403 

32,333 

318,493 

339,613 

Chosen  

4,859 

23,012 

4 

4 

Straits  Settlements  . 
Dutch  East  Indies.. 
French  Indo-China. 
Other  countries  

5,574 
4,580 
11,583 
2,174 

6,416 
2,808 
1,608 
2,657 

3,815 
1,066 
764 
49,581 

7,637 
1,242 
9,005 
*1,554 

Total  imports.  . 
Reexports. 

1,335,190 
1,703 

2,099,749 
31,849 

42,063,318 
35,390 

*2,295,417 

6 

Net  imports . . .       1,333,487         2,067,900       2,027,928 


1Unginned  cotton  reduced  to  ginned  at  ratio  of  3  pounds  unginned  to  1  pound  ginned. 

2Ginned  and  unginned  cotton  not  reported  separately  by  countries.  Country  distribu- 
tion estimated  on  assumption  that  all  cotton  from  the  Straits  Settlements  and  the  Dutch 
East  Indies,  and  part  of  that  from  French  Indo-China  was  unginned. 

•Reported  as  from  "African  countries." 

'Figures  for  Chosen  are  not  available  for  1920  and  1921,  and  are  not  included  in  the  item 
"Other  countries"  or  in  the  total  for  those  years. 

•Not  available. 

Despite  its  preeminent  position  as  the  leading  producer 
and  exporter  of  cotton  the  United  States  imports  a  certain 
amount  of  cotton  for  special  purposes.  Table  K  shows 
the  imports  by  country  of  production  for  the  years  1913, 
1919,  1920  and  1921. 

Most  of  the  cotton  imported  is  Egyptian,  which  is  used 
on  account  of  the  strength  imparted  by  its  long  staple 
for  mercerizing  or  for  the  manufacture  of  thread  or  auto- 
mobile tires.  Because  of  the  ecru  shade  of  some  varieties 
they  are  used  for  the  manufacture,  without  dyeing,  of 


54 


SOME  GREAT  COMMODITIES 


TABLE  K—  TOTAL  IMPORTS  OF  COTTON  INTO  THE  UNITED  STATES  BY 
COUNTRIES  OF  PRODUCTION 


1913 


1921 


Egypt  ..........................  167,801  203,006  359,789  145,787 

China  ..........................  14,505  18,391  58,823  3,582 

Peru  ...........................  12,786  46,985  50,913  25,961 

Mexico  .........................  7,132  61,780  76,169  78,429 

British  India  ....................  5,241  9,949  14,088  3,817 

Other  countries  .................  2,495  10,606  40,207  20,321 

Total  ......................     209,960    350,717    599,989    277,897 

balbriggan  underwear  and  lace  curtains.  Considerable 
quantities  of  Mexican  cotton  are  imported,  principally  be- 
cause of  its  proximity.  At  a  number  of  border  points, 
especially  in  the  Imperial  Valley,  Mexican  seed  cotton  is 
brought  into  the  United  States  for  ginning. 

Chinese  and  Indian  cottons  are  distinctly  inferior  to  the 
American  variety,  but  are  brought  in  for  use,  to  some  ex- 
tent at  least,  for  mixing  with  the  higher  priced  domestic 
cotton.  The  Peruvian  cotton  imported  is  largely  "Rough 
Peruvian,"  used  principally  for  mixing  with  wool. 

WORLD  CONSUMPTION  OF  COTTON 

Even  before  the  war  there  was  a  growing  tendency  for 
the  cotton-producing  countries  to  manufacture  their  own 
cotton  goods.  To  an  ever-increasing  extent  the  United 
States,  India,  China,  and  Brazil  were  becoming  independent 
of  the  cotton-manufacturing  industries  of  Europe,  espe- 
cially with  regard  to  the  coarser  kinds  of  goods.  The  war 
accelerated  this  movement  while  at  the  same  time  it  en- 
abled the  Japanese  greatly  to  expand  their  market. 

Table  L  shows  estimates  of  the  world's  cotton  consump- 
tion by  leading  countries  in  the  seasons  from  1909-10  to 
1920-21.  Satisfactory  consumption  statistics  for  the 


COTTON 


55 


individual  countries  of  continental  Europe  have  been  lack- 
ing since  the  outbreak  of  the  war.  The  average  consump- 
tion in  Germany  during  the  five  pre-war  years  from  1909 
to  1913  was  1,741,000  bales,  in  Russia  1,589,000  bales,  in 
France  984,000,  Italy  841,000,  and  in  Austria-Hungary 
796,000  bales.  For  later  years  the  net  imports  shown  in 
Table  G  give  an  indication  of  the  quantities  that  were 
available  for  consumption. 


TABLE  L — COTTON  CONSUMPTION  BY  PRINCIPAL  COUNTRIES 

1909-10 

Country          1913-14  1914-15  1915-16  1916-17  1917-18  1918-19  1919-20  1920-21 
(5-yr. 
aver.)  (in  thousands  of  500-lb.  bales) 


United  States.  .  . 
United  Kingdom. 
Continental 
Europe  ....... 

5,099 
4,049 

6,949 

5,678 
3,890 

6,250 

6,469 
4,000 

6,400 

6,840 
4,030 

4,616 

6,598 
3,280 

3,050 

5,831 
2,725 

2,975 

6,474 
3,700 

3,660 

4,955 
2,040 

4,400 

British  India  .... 
Japan 

1,704 
1  250 

1,607 
1  400 

1,660 
1  650 

1,764 
1,850 

1,775 
2,000 

1,627 
1,870 

1,646 
1,825 

1.840 
1,800 

Canada  

128 

185 

208 

191 

250 

198 

220 

150 

Other  countries.  . 

847 

1,000 

900 

1,180 

1,035 

1,000 

1,200 

1,250 

Total 20,026     20,010     21,287     20,471      17,988     16,226     18,725     16,435 

The  importance  of  a  nation's  cotton-manufacturing  in- 
dustry is  not  to  be  measured  solely  by  the  quantity  of  raw 
material  consumed.  Too  much  depends  upon  the  quality 
of  the  raw  material  and  of  the  products  made  from  it. 
In  order  to  show  the  machinery  equipment  of  the 
more  important  cotton-manufacturing  countries  Table 
M  presents  the  number  of  spindles  by  countries  for 
the  season  just  before  the  war,  1913—14,  and  for 
the  season  seven  years  before  and  after,  1906-07  and 
1920-21. 

The  total  number  of  spindles  increased  only  5  per  cent, 
between  the  seasons  ending  in  1914  and  1921  although 
during  the  preceding  seven  years  the  increase  was  19  per 


SOME  GREAT  COMMODITIES 

TABLE  M— COTTON  SPINDLES  IN  THE  PRINCIPAL  COUNTRIES 


Country 


1906-07 


United  Kingdom 50,680 

United  States 26,375 

Germany 9,339 

France 6,800 

Russia 6,500 

British  India v  5,280 

Austria-Hungary 3,616 

Italy 3,500 

Spain 1,850 


Switzerland, 
[apan 


Belgium 

Canada 

China 

Poland 

Other  countries. 


1,484 

1,483 

1,300 

1,140 

800 

750 

2 

2,436 


1913-14 
(000  omitted) 

56,300 

32,107 

11,550 

7,410 

9,160 

6,500 

4,970 

4,620 

2,210 

1,380 

2,750 

1,250 

1,530 

965 

1,000 

2 

2,695 


1920-21 

56,140 
36,620 
9,400 
9,600 
7,100 
6,770 
'4,720 
4,500 
1,800 
1,530 
4,130 
1,520 
1,550 
1,370 
1,800 
1,160 
3,300 


Total 123,333        146,397        153,010 

Including  Austria  1,140,000  spindJes  and  Czechoslovakia,  3,580,000  spindles. 
»Not  available. 

cent.  Since  the  British  mills,  in  general,  spin  finer  counts 
of  yarns  than  American  mills  the  quantity  of  cotton 
consumed  per  spindle  is  less.  Thus  while  America  con- 
sumes the  most  cotton  Great  Britain  has  the  largest  num- 
ber of  spindles  in  the  world.  Operation  day  and  night 
and  the  manufacture  of  the  coarser  kinds  of  goods  enable 
Japan  to  consume  large  quantities  of  cotton  with  relatively 
little  equipment.  That  country,  however,  is  rapidly 
adding  to  its  number  of  spindles. 


TREND  OF  COTTON  PRICES 


Through  1913  and  in  the  first  part  of  1914  cotton  prices 
at  New  Orleans,  the  principal  spot  market,  ranged  between 
12  and  14  cents  a  pound  for  middling  cotton.  The  ex- 
change was  closed  upon  the  outbreak  of  the  war,  but  when 


COTTON  57 

trading  was  resumed  a  low  point  of  6J  cents  a  pound  was 
reached  on  October  24,  1914.  This  prevailed  until  the 
28th  when  the  price  began  its  gradual  climb  to  41}  cents, 
which  was  the  quotation  from  April  16  to  19,  1920.  The 
course  of  prices  is  traced  in  Table  N,  which  shows  the 
closing  quotations  for  middling  cotton  at  New  Orleans 
by  months  from  1913  to  1921.  Middling  is  the  grade 
which  forms  the  basis  for  cotton  quotations.  American 
cotton  with  the  ordinary  length  of  staple  is  rated  above 
or  below  middling  according  to  the  amount  of  leaf,  dirt, 
sand,  motes  and  other  extraneous  matter  it  contains,  to- 
gether with  its  color.  A  bright  creamy  color  is  most  de- 
sired, but  weather  and  soil  conditions  often  cause  cotton 
to  become  "off  color,"  "tinged"  or  "stained,"  so  that  it 
is  reduced  in  grade.  The  length  of  staple  is  considered 
apart  from  the  grade,  cotton  that  averages  if  inches  or 
more  in  length  of  staple  usually  being  called  "staple" 
cotton  or  "long-staple"  cotton.  The  great  bulk  of  this 
cotton  is  grown  in  the  Mississippi  or  Yazoo  Delta  which 
forms  the  western  part  of  the  State  of  Mississippi. 

TABLE  N— CLOSING  QUOTATION  FOR  MIDDLING  COTTON  AT  NEW  ORLEANS 

ON  THE  AVAILABLE  DATE  NEAREST  THE  FIFTEENTH  OF  EACH  MONTH 

FROM  JANUARY,  1913,  TO  DECEMBER,  1921 

Month  1913      1914       1915     1916      1917      1918      1919      192°      1921 

(in  cents  per  pound) 

January 12.50  12.88  7.75  12.19  18.00  31.75  29.00  40.25  1500 

February 12.56  13.00  8.06  11.56  17.19  30.38  26.75  39.25  13.25 

March 12.50  13.00  8.44  11.88  17.63  32.50  27.50  41.00  10.75 

April 12.50  13.13  9.37  11.88  19.81  33.00  26.75  41.50  1125 

May 12.31  13.25  9.00  12.75  19.63  29.25  28.13  4025  ll'88 

June 12.50  13.94  9.38  12.69  24.19  31.00  31.63  40>5  ll!25 

July 12.44  13.31  8.50  13.00  25.88  30.00  34.25  39.00  11  88 

August 12.00  i  9.00  14.00  25.75  29.50  30.88  3450  1213 

September 13.00  1  10.25  15.13  20.19  33.50  29.00  28.50  19^50 

October 13.25  6.75  12.00  16.81  27.13  30.75  35.00  20.25  19.00 

November 13.31  7.75  11.44  19.50  28.00  29.38  39.50  18.25  1600 

December 13.00  7.00  11.82  18.00  29.00  29.00  39.75  14.75  16.75 

»No  quotation,  exchange  closed. 


58  SOME  GREAT  COMMODITIES 

INTERNATIONAL  TRADE  IN  COTTON  PIECE  GOODS 

The  United  Kingdom,  the  United  States  and  Japan  are 
the  chief  exporters  of  cotton  piece  goods.  Before  the  war 
France,  Italy,  Germany  and  the  Netherlands  were  like- 
wise large  exporters,  but  excepting  France  these  countries 
had  not  recovered  their  pre-war  position  by  the  end  of 
1921.  British  India  and  China  are  the  leading  importers, 
although  the  development  of  domestic  cotton  manufac- 
turing is  lessening  their  import  needs,  especially  with  re- 
spect to  the  coarser  kinds  of  goods,  which  form  the  bulk 
of  their  purchases  and  which  can  readily  be  made  from 
the  short-staple  native  cottons.  The  world's  average 
annual  production,  consumption,  exports  and  imports  of 
cotton  piece  goods  by  leading  countries,  for  the  pre-war 
years  from  1910  to  1913,  as  estimated  by  the  Research 
Committee  of  the  National  Council  of  Cotton  Manufac- 
turers, are  shown  in  Table  O. 

No  later  compilation  is  available,  but  it  is  probable  that 
Great  Britain,  though  still  the  largest  exporter,  no  longer 
furnishes  as  much  as  two-thirds  of  the  world's  total  ex- 
ports. American  and  especially  Japanese  exports  have 
expanded  greatly  while  British  shipments  have  fallen  off 
since  1913. 

Table  P,  giving  the  quantity  of  piece  goods  exported 
from  the  United  Kingdom  in  1913,  1919,  1920  and  1921, 
by  countries  of  destination,  shows  the  decline  in  total  ex- 
ports in  1921,  as  compared  with  1913,  to  have  been  about 
three-fifths.  The  decrease  was  especially  heavy  in  the 
trade  with  India  and  China,  which  were  usually  Great 
Britain's  best  customers.  So  marked  was  the  decline  in 
exports  to  China  in  1921  that  Egypt  replaced  China  as 


COTTON 


59 


TABLE  O— AVERAGE  ANNUAL  PRODUCTION,  CONSUMPTION,  EXPORTS  AND 
IMPORTS  OF  COTTON  PIECE  GOODS  FROM  1910  TO  1913 


Country 


Production 


United  States  

....     1,900 

United  Kingdom  

....     1,400 

Russia  

....       678 

Germany  

650 

China  

604 

British  India  

530 

France  

....        353 

Japan  

....        342 

Italy  

....       312 

Austria-Hungary  

....        295 

Brazil  

125 

Spain  

125 

Netherlands  

97 

Belgium  

77 

Mexico.  

66 

Canada  

50 

Turkey  

25 

Dutch  East  Indies  

4 

Argentina  

Other  countries  

184 

Consumption          Exports 
(in  millions  of  pounds) 


Total 7,817 


1,812 

304 

657 

579 

819 

998 

263 

287 

227 

271 

150 

115 

31 

75 

74 

74 

140 

94 

66 

781 

7,817 


99 

1,120 
30 
88 

22 
94 
70 
92 
27 

12 
73 
12 


1 

is 

1,755 


Imports 

11 
24 

9 

17 

215 

490 

4 
15 

7 

3 
25 

2 

10 
8 

24 
116 

90 

66 
612 

1J55 


the  second  leading  buyer.    Exports  to  the  United  States  and 
Morocco,  on  the  other  hand,  showed  increases  over  1913. 

TABLE  P— EXPORTS  OF  COTTON  PIECE  GOODS  FROM  THE  UNITED  KINGDOM 


Country 


1913         1919        1920        1921 
(in  millions  of  yards1) 


British  India  

3,057 

768 

1,374 

1,092 

China,  including  Hongkong  

717 

304 

453 

211 

Turkey  

361 

333 

263 

56 

Dutch  East  Indies  

305 

124 

209 

159 

Egypt,  including  Anglo-Egyptian  Sudan  

267 

185 

297 

220 

Argentina  

199 

108 

162 

103 

Australia  

168 

75 

138 

115 

British  West  Africa  

145 

115 

135 

55 

Straits  Settlements  

132 

51 

101 

42 

Morocco  

60 

57 

43 

65 

United  States  

44 

41 

102 

55 

Other  countries  

1,620 

1,363 

1,158 

730 

Total  

,     7,075 

3^24 

4,435 

2,903 

for  1920  and  1921  are  in  millions  of  square  yards. 


60  SOME  GREAT  COMMODITIES 

In  the  year  beginning  April  i,  1913,  British  India  im- 
ported 3 , 1 59,000,000  yards  of  piece  goods  besides  fents.  Of 
this  amount  the  United  Kingdom  supplied  97  per  cent. 
Imports  from  the  United  States  and  Japan  together  made 
up  less  than  I  per  cent,  of  the  total.  While  important 
amounts  were  brought  from  the  Netherlands,  Italy,  Switz- 
erland, Belgium,  Germany  and  other  European  countries, 
America  and  Japan  were  destined  to  become,  except  for 
Great  Britain,  the  principal  sources  of  India's  imports  of 
cloth.  Purchases  from  Japan  grew  from  9,000,000  yards 
in  1913-14  to  170,000,000  in  1920-21  and  90,000,000  in 
1921-22.  Imports  from  the  United  States  showed  no 
gain  until  1921-22,  when  21,000,000  yards  were  bought 
as  contrasted  with  10,000,000  yards  in  1913-14.  In 
1921-22  the  United  Kingdom  furnished  88  per  cent, 
of  the  imports,  Japan  8  per  cent.,  and  the  United  States 
2  per  cent. 

The  imports  of  cotton  piece  goods  into  British  India 
from  the  United  Kingdom,  the  United  States  and  Japan 
are  shown  in  Table  Q  for  the  fiscal  years  1913-14, 1919-20, 
1920-21  and  1921-22.  Total  imports  of  fents,  or  rem- 
nants, which  are  not  separated  by  countries  in  the  later 
trade  returns,  are  shown  as  a  whole. 

TABLE  Q — IMPORTS  OF  COTTON  PIECE  GOODS  INTO  BRITISH  INDIA  BY 
FISCAL  YEARS  BEGINNING  APRIL  1 

_  1913  1919       1920         1921 

<"0untry  (in  millions  of  yards) 

Total  piece  goods  except  fents— 

United  Kingdom 3,068  963  1,278  947 

United  States 10  6  9  21 

japan.  .                              9  76  170  90 

Other  countries 72  19  34 

Total.  .                                             ....  3,159  1,064  1,491  1,080 

Fents _iZ  _18  _10 

Total  piece  goods 3,197  1,081  1,509  1,090 


COTTON  6 i 

Japanese  progress  in  the  Indian  market  has  been  due, 
aside  from  cheap  labor,  largely  to  close  cooperation  be- 
tween the  government,  banks,  shipping  companies,  mer- 
chants and  manufacturers.  The  chief  handicaps  to 
Japanese  expansion  have  been  rising  labor  costs  and  lack 
of  machinery  and  capital.  India  is  Japan's  second  best 
customer  for  cotton  goods,  China  ranking  first  in  this  re- 
spect. 

Indian  mills  furnish  the  principal  competition  which 
the  British  product  encounters  in  India.  They  are 
becoming  increasingly  important  in  supplying  the  'do- 
mestic demand  as  the  quantity  of  their  output  improves. 
The  piece  goods  turned  out  are  mainly  unbleached  shirt- 
ings made  from  native  cotton.  Under  war  conditions 
the  mills  were  able  not  only  to  compete  more  successfully 
in  the  domestic  market,  but  to  develop  export  markets  in 
the  Orient,  on  the  Persian  Gulf  and  the  Red  Sea,  and  in 
East  Africa. 

Exports  of  cotton  piece  goods  are  not  a  particularly 
important  part  of  the  total  export  trade  of  the  United 
States,  as  they  constituted  of  late  years  less  than  2  per 
cent,  of  the  total  value  of  exports.  Though  the  second 
largest  exporter,  the  United  States  exported  in  the  years 
1910  to  1913  less  than  one-eleventh  of  the  British  ship- 
ments. Home  consumption  was  so  large  that  only  5 
per  cent,  of  production  was  shipped  abroad. 

Table  R  shows  the  exports  of  cotton  piece  goods  from 
continental  United  States  in  1913,  1919,  1920  and  1921. 

American  strength  in  foreign  markets  for  piece  goods 
lies  to  a  great  extent  in  standardization  of  a  narrow  range 
of  qualities,  mostly  unbleached  cloths  and  prints,  and  the 
maintenance  of  a  consistently  good  quality.  These  goods 


62  SOME  GREAT  COMMODITIES 

can  be  made  on  automatic  looms,  of  which  there  are  some 
400,000  in  the  United  States,  as  compared  with  15,000 
in  England.  American  manufacturers  have  specialized 
in  quantity  production  and  so  far  have  left  it  to  England 
to  excel  in  furnishing  large  assortments  of  designs  in  rela- 
tively small  quantities. 

TABLE  R— EXPORTS  OF  COTTON  PIECE  GOODS  FROM  THE  UNITED  STATES 

r  U913  21919          21920  '1921 

Country  (in  millions  of  yards) 

Philippine  Islands.  .  93  47  63  54 

China 80  38  28  25 

Aden 25  9  6  15 

Canada 27  64  66  43 

Mexico 3  28  20  49 

Central  America 33  55  57  71 

Porto  Rico 33  37  56  38 

Cuba..,  22  67  161  23 

Haiti 20  30  22  21 

Dominican  Republic 13  13  5 

British  West  Indies 10  26  23  28 

Argentina 2  32  46  25 

Chile 10  19  19  21 

Colombia 26  46  83  14 

Venezuela 4  17  36  2 

Other  countries 86  197  161  165 

Total 7. 487          "725  881          ~599 

^Fiscal  year  ending  June  30. 
•Calendar  year. 


IRON  AND  STEEL 

IRON  is  the  most  abundant  of  the  heavy  metals,  as 
well  as  the  one  most  essential  to  civilization.     The 
basis   of   modern    industry   is   steel.     Superior  iron 
products  and  steel  were  made  in  medieval  times,  and  the 
use  of  the  metal  dates  back  to  the  beginning  of  recorded  his- 
tory, but  the  achievement  of  the  nineteenth  century  was 
the  development  of  processes  which  made  possible  the 
conversion  in  a  large  way  of  ore  to  iron  and  of  iron  to  steel. 
Individual  skill  and  hand  labor  are  now  largely  superseded 
by  chemistry  and  mechanical  power. 

WORLD'S  SUPPLY  OF  IRON  ORE 

Metallic  iron  is  usually  found  in  combination  with  other 
substances,  rarely  in  the  native  or  pure  state.  The  com- 
mercial value  of  iron  ore  for  smelting  depends  primarily 
on  the  percentage  of  metal  content.  Ore  containing  as 
high  as  72  per  cent,  of  metal  is  known  to  exist,  and  ores 
which  yield  as  much  as  60  per  cent,  of  iron  are  of  a  highly 
desirable  grade.  Such  ores  are,  however,  not  plentiful, 
and  by  far  the  greater  proportion  of  the  world's  supply 
contains  a  lower  percentage  of  iron.  The  average  metal 
content  of  ores  mined  in  the  United  States  at  present  is 
slightly  over  50  per  cent.  The  minimum  for  commercial 
use  is  now  about  25  per  cent,  iron  content.  Quality  may 
l\e  of  as  much  significance  as  metal  content.  Ore  with  a 
high  percentage  of  iron  is  in  some  cases  rendered  too 

63 


64  SOME  GREAT  COMMODITIES 

costly  to  smelt  by  the  presence  of  a  small  quantity  of 
titanium,  while  in  other  ores  a  low  iron  content  may  be 
compensated  by  admixture  of  materials  that  render  the 
ore  self-fluxing.  Methods  for  utilizing  the  abundant  low- 
grade  ores  of  the  United  States,  which  under  present 
conditions  do  not  pay  to  smelt,  are  under  consideration. 

Only  the  roughest  approximation  can  be  made  of  the 
world's  iron  ore  resources.  Even  in  North  America  ex- 
plorations are  by  no  means  complete.  According  to 
figures  presented  before  the  International  Geological  Con- 
gress at  Stockholm  in  1910,  the  actual  world  reserves  of 
workable  ore  conforming  to  the  present  standard  of  iron 
content  were  more  than  10,000,000,000  tons  of  metallic 
iron  content.  Deposits  of  inferior  and  less  accessible  ores 
were  placed  at  between  50,000,000,000  and  60,000,000,000 
tons  of  metallic  iron,  and  it  was  further  estimated  that 
unexplored  regions  would  bring  the  entire  world  possession 
of  actual  and  potential  ore  reserves  up  to  424,000,000,000 
tons  of  metallic  iron.  These  figures  were  based  on  detailed 
explorations  in  the  United  States  and  the  greater  part  of 
Europe  and  Japan,  partial  explorations  in  certain  other 
regions,  and  on  estimates  for  the  rest  of  the  world.  More 
recently  the  available  resources  of  Europe  and  the  Ameri- 
cas combined  were  estimated  as  14,310,000,000  tons  of 
metallic  iron,  this  total  including  some  low-grade  ores. 
Limited  areas  are  now  being  worked  in  northern  and  south- 
ern Africa,  India,  Australia,  Japan,  China,  Chosen,  the 
Philippines  and  other  regions,  and  it  is  considered  probable 
that  extensive  reserves,  as  yet  undiscovered,  exist  in  the 
continents  of  Asia,  Africa  and  Australia,  but  too  little  is 
known  to  estimate  their  total  ore  content. 

On  the  basis  of  explorations  up  to  the  present  time,  the 


IRON  AND  STEEL  65 

six  important  ore  centers  of  the  world  are  the  Lake  Supe- 
rior region,  Lorraine,  northern  Sweden,  Cuba,  Newfound- 
land and  Brazil. 

The  Lake  Superior  region  ranks  first  in  the  world  as  an 
ore  producer  containing,  according  to  estimates  presented 
at  the  Stockholm  Congress,  2,020,000,000  tons  of  metallic 
iron  in  readily  available  reserves  and  36,000,000,000  tons 
in  potential  reserves.  A  more  recent  estimate  places  the 
available  reserves  at  1,430,000,000  tons  of  metallic  iron. 
These  ores  are  chiefly  hematite  with  an  iron  content  aver- 
aging above  50  per  cent.,  but  because  of  the  increasing 
percentage  of  phosphorus  a  decreasing  proportion  of  the 
ores  is  suitable  for  the  acid  Bessemer  process. 

The  minette  ores  of  Lorraine,  extending  into  Belgium  and 
Luxemburg,  are  second  in  importance  to  those  of  the  Lake 
Superior  region.  Minette  ore  furnishes  most  of  the  raw 
material  for  France's  iron  industry  and  formerly,  when 
Germany  owned  half  of  it,  was  also  the  principal  source  of 
ore  for  the  German  iron  industry.  Its  available  reserves 
amount  to  1,850,000,000  tons  metallic  iron  content.  Not 
only  is  the  iron  content  of  minette  ore  low,  from  27  to 
36  per  cent.,  but  its  phosphorus  content  is  high  and  con- 
sequently pig  iron  made  from  it  must  be  smelted  by  one 
of  the  basic  processes.  The  largest  known  ore  supplies 
which  contain  60  per  cent,  or  more  of  iron  are  in  Sweden. 
This  ore  comes  from  the  magnetic  deposits  of  Lapland, 
largely  north  of  the  Arctic  Circle,  which  were  estimated 
in  1910  at  over  673,000,000  tons  metallic  iron.  Fields  in 
the  southern  part  of  the  country  furnish  ore  of  the  highest 
quality  with  a  slightly  lower  percentage  of  iron.  Swedish 
ores  have  a  wide  range  of  phosphorus  content. 

Cuba  contains  actual  reserves  of  about  1,000,000,000 


66  SOME  GREAT  COMMODITIES 

tons  metallic  iron  and  probably  500,000,000  tons  in  poten- 
tial reserves.  The  ore  is  of  high  grade  with  phosphorus 
content  low  enough  to  be  within  the  Bessemer  limit,  but 
the  mines  have  as  yet  been  little  developed.  Newfound- 
land has  enormous  submarine  deposits  in  Conception  Bay, 
with  small  outcroppings  on  Bell  Island.  It  is  good  ore, 
easily  reduced.  The  available  reserves  are  estimated  at 
1,750,000,000  tons  metallic  iron  content. 

The  Brazilian  ore  fields  form  perhaps  the  most  impor- 
tant undeveloped  iron  area  of  the  world  and  rank  among 
the  six  most  important  ore  centers.  Estimates  made  of 
these  ore  deposits  vary  from  3,500,000,000  tons  of  ore  to 
as  high  as  7,500,000,000  tons.  The  ore  is  very  rich,  a 
great  proportion  containing  iron  oxide  up  to  97  per  cent. 
The  deposits  have  not  been  developed  sufficiently  to  jus- 
tify an  exact  statement  as  to  the  total  metallic  iron  con- 
tent but  the  State  of  Minas  Geraes  alone  is  believed  to 
have  in  its  ore  fields  more  iron  than  that  in  all  Europe. 
An  obstacle  to  mining  development  is  the  inaccessibility 
of  the  deposits  under  present  conditions  of  transportation. 
Most  of  the  Brazilian  ore  will  have  to  be  exported  for 
smelting  unless  adequate  supplies  of  coking  coal  are  dis- 
covered in  the  country  or  hydro-electric  developments, 
which  are  already  begun,  provide  sufficient  cheap  power. 
British  and  American  capital  have  for  some  time  controlled 
certain  important  holdings  in  Brazil,  and  German  and 
Luxemburg  interests  are  adding  to  their  smaller  properties 
there.  Brazilian  ore  will  be  especially  valuable  to  the 
British  industry  which  requires  an  ore  low  in  phosphorus. 

The  United  States  has,  besides  the  Lake  Superior  region, 
three  other  main  ore  regions.  They  are  the  Eastern  re- 
gion, containing  the  so-called  Clinton  ores,  the  Mississippi 


IRON  AND  STEEL  67 

Valley  and  the  Cordilleran  or  mountain  regions  of  the 
West.  American  ore  containing  60  per  cent,  or  more  of 
iron  is  insignificant  in  amount  and  is  rapidly  disappearing. 
The  supply  of  50  per  cent,  ore  is  sufficient  for  many  years 
to  come,  and  there  are  very  large  reserves  of  40  per  cent, 
and  lower  grade  ore. 

Allowing  for  pig  iron  production  at  the  rate  of  70,000,000 
tons  a  year,  it  is  estimated  that  the  available  ore  resources 
of  Europe  and  North  and  South  America  will  last  200 
years,  but  with  even  a  low  rate  of  increase  in  annual  pig 
iron  production,  the  duration  of  the  supply  as  at  present 
estimated  would  be  much  shortened.  There  seems  no 
doubt,  however,  that  exploration  will  reveal  vast  additions 
to  the  present  known  supply.  Table  A  summarizes  the 
actual  reserves  in  the  leading  countries  of  ore  which  con- 
forms to  present  standards  of  iron  content  and  which  would 
be  considered  workable  by  practical  metallurgists.  The 
estimates  are  those  prepared  for  the  International  Geolog- 
ical Congress  in  1910,  together  with  later  estimates  for 
European  countries  published  by  the  United  States 
Geological  Survey.  No  potential  reserves  or  estimates  for 
imperfectly  explored  areas  are  included.  Thus  it  will  be 
noted  that  Brazil  does  not  appear  in  the  list  of  countries. 

The  geographical  location  of  iron  and  steel  industries  is 
determined  primarily  by  advantages  in  assembling  raw 
materials  and  secondarily  by  advantages  in  distributing 
finished  products  in  domestic  and  foreign  trade.  In  ad- 
dition to  ore  supply,  chief  requisites  for  the  establishment 
of  a  steel  plant  are  fuel  and  limestone  (or  some  other  flux- 
ing material),  labor  supply  and  transportation  facilities. 
Ii\  some  favored  regions,  as  in  the  British  Isles,  along  the 
Rhine,  and  in  the  Birmingham,  Alabama,  district,  coal 


68  SOME  GREAT  COMMODITIES 

and  ore  deposits  are  found  in  close  proximity.  When  this 
is  not  the  case,  the  rule  has  been  that  "Iron  goes  to 
coal."  Swedish  and  Spanish  ores  have  for  years  moved 
to  the  fuel  and  blast  furnaces  of  England  and  Germany. 
Foreign  ores,  chiefly  from  Spain  and  northern  Africa,  now 

TABLE  A — IRON  CONTENT  OF  PRINCIPAL  KNOWN  IRON  ORE  RESERVES 

Pre-war  estimates  Post-war  estimates1 

(Stockholm  Congress,  1910) 

(in  millions  of  tons) 

United  States 2,305  '  2,935 

Newfoundland 1,961  1,750 

t5>        Cuba 857  !  1,080 

Great  Britain 455  7  318 

/v  \         France 1,140  1,790 

v                Germany 1,270  256 

\0             Luxemburg 90,  60 

Sweden 740  T  443 

/              Russia 387  4  2199 

Spain 349  353 

Norway 124  \  °  86 

Austria 90  77 

^Estimate  for  United  States  from  Mineral  Industry,  1918;  Newfoundland  and  Cuba  esti- 
mates adopted  by  F.  H.  Hatch,  1920;  other  countries  from  Bulletin  706,  U.  S.  Geological 
Survey. 

^Central  Russia,  Ural  region  and  Caucasus,  excluding  the  Ukraine  and  Finland. 

furnish  about  one-third  of  the  supply  used  in  the  British 
industry,  freight  rates  being  kept  at  a  minimum  by  utiliza- 
tion of  ore-carrying  vessels  to  take  coal  as  return  cargo. 
Lake  Superior  ores  are  handled  three  times  and  carried 
almost  1,200  miles  by  rail  and  water  to  the  great  coal 
fields  around  Pittsburgh,  a  distance  longer  than  that  from 
Spanish  mines  to  British  furnaces.  While  Minnesota  and 
Michigan  produce  over  80  per  cent,  of  all  ore  mined  in  the 
United  States,  their  smelting  industry  is  small  and  60 
per  cent,  of  the  country's  pig  iron  output  is  made  in  Penn- 
sylvania and  Ohio. 

Hydro-electric  power  as  a  substitute  for  coal  in  ore  re- 


IRON  AND  STEEL  69 

duction  may  bring  about  far-reaching  developments  in 
the  steel  industry  if  costs  can  be  reduced.  With  the  in- 
troduction a  century  ago  of  coke  as  fuel  for  blast  furnaces, 
replacing  charcoal,  supremacy  passed  from  Sweden  to 
England.  Electric  smelting  offers  possibilities  for  the 
utilization  of  important  ore  fields  for  which  no  convenient 
coal  supply  exists.  This  method  has  risen  to  potential 
importance  in  comparatively  recent  years,  one  form  of  it 
having  been  developed  in  Sweden  in  1910.  Costs  of  elec- 
tric smelting  have  been  found  relatively  high  and  thus  far 
the  coke-fired  blast  furnace  has  held  its  own  in  countries 
where  fuel  is  readily  obtainable.  Brazil,  with  its  unsur- 
passed water-power  resources  and  rich  ore  deposits,  has 
already  made  a  small  beginning  in  electric  smelting  and  is 
using  electric  power  in  other  lines  of  industry  because  of 
the  insufficiency  of  domestic  coal.  As  government  policy 
definitely  encourages  domestic  manufacture,  it  seems  only 
a  question  of  capital  and  time  for  installation  until  a  steel 
industry  may  be  created  in  Brazil  independent  of  imported 
fuel. 

Labor  can  be  transported  to  sparsely  populated  locali- 
ties when  other  conditions  favor  industrial  development, 
and  new  enterprises  in  turn  help  to  build  up  population. 
It  is  evident,  however,  that  iron  and  steel  manufacturing 
has  thus  far  developed  almost  exclusively  in  well  popu- 
lated countries  which  afford  a  market  as  well  as  a  labor 
supply.  While  Japan,  China,  and  British  India  lead 
Western  nations  at  present  in  the  available  supply  of 
cheap  labor,  the  unsettled  condition  of  the  labor  situation 
in  the  Orient  points  to  the  possible  removal  of  this  appar- 
enf  advantage.  A  low  wage  scale,  moreover,  does  not 
insure  low  labor  costs  per  unit  of  output  and  it  should 


70  SOME  GREAT  COMMODITIES 

not  be  assumed  that  cost  of  production  will  be  smaller 
in  the  East  than  elsewhere. 

Of  hardly  less  importance  in  the  geographical  location 
of  the  industry  than  supply  of  raw  materials  and  labor 
is  the  matter  of  distribution  of  finished  products  in  domes- 
tic and  foreign  trade.  Cheap  water  transportation  by 
rivers  and  canals  gives  the  steel  industries  of  Great  Britain, 
Germany,  Belgium  and  northern  France  easy  access  to 
shipping  ports  and  consequently  to  foreign  markets,  while 
steel  products  from  Pittsburgh  and  Youngstown  must 
bear  the  cost  of  a  rail  haul  of  several  hundred  miles  to 
seaboard  before  they  can  be  loaded  for  Europe  or  the 
Orient.  In  general  the  steel  industry  of  Europe  has  better 
facilities  for  entering  foreign  trade  than  has  the  American 
industry.  The  latter,  on  the  contrary,  has  a  far  more 
extensive  domestic  market  than  is  the  case  in  any  Euro- 
pean country.  The  bulk  of  the  steel  manufacturing  in  the 
United  States  is  carried  on  in  the  interior  where  finished 
products  can  be  easily  distributed  in  the  home  market, 
only  a  small  part  of  the  industry  being  at  seaboard. 
Future  development  of  the  St.  Lawrence  Canal  route  may 
provide  water  transportation  for  an  important  steel  district. 
For  the  future  it  is  predicted  in  some  quarters  that  more 
consideration  will  be  given  to  accessibility  of  ore  supply 
and  markets  than  has  heretofore  been  the  rule. 

The  movement  of  iron  ore  in  international  trade  is 
usually  subordinate  to  its  consumption  in  the  producing 
countries.  Leading  steel-making  countries,  with  the  ex- 
ception of  Germany  and  Belgium,  depend  primarily  on 
native  ores  and  only  secondarily  on  imported  supplies. 
From  the  standpoint  of  ore-producing  countries,  the  de- 
termining factor  in  the  question  of  home  manufacture 


IRON  AND  STEEL 


versus  exportation  of  ores  is  cost.  European  ore  move- 
ments will  probably  continue  to  be  influenced  by  con- 
venience and  cost  of  transportation  more  than  by  political 
boundaries  and  ore  will  generally  be  smelted  where  it 
can  be  done  most  cheaply,  taking  all  elements  of  cost  into 
consideration.  The  accompanying  table  shows  produc- 
tion, imports  and  exports  of  ore  of  a  number  of  countries 

TABLE  B— PRODUCTION,  IMPORTS  AND  EXPORTS  OF  IRON  ORE  BY  LEADING 
COUNTRIES,  1913,  1919  AND  1920 


1913 


1920 


1919 
(in  tons1) 
Production 

United  States 61,980,437  60,965,418  67,604,465 

United  Kingdom 15,997,328  12,254,195  12,707,475 

Germany 28,607,900  6,153,800  6,361,600 

Luxemburg 7,333,372  3,112,472  3,704,390 

France 21,918,000  9,340,000  13,871,187 

Belgium... 150,450  4,820  17,260 

Sweden 7,475,571  4,981,110  4,519,112 

Spain 9,861,668  4,640,061  4,767,693 

Imports 

United  States2 2,246,353  476,461  1,273,456 

United  Kingdom 7,442,249  5,200,696  6,499,551 

Germany J 1/1  mo  ruq  6,450,421 

Luxemburg \  14,019,045  61U39  1>016>0.79 

France 1,410,424  303,853  404,725 

Belgium 7,085,163  724,930  2,450,367 

Sweden 2,909  . .  762 

Spain 4  *  < 

Exports 

United  States3 1,224,112  996,569  1,145,037 

United  Kingdom 6,378  2,364  2,095 

Germany 5  9 «IQ  IKQ  3  160,520 

Luxemburg }  *ow,ioc  1,207,510  2,042,889 

France 10,066,628  1,997,171  4,839,516 

Belgium 724,765  15,520  152,808 

Sweden 6,439,750  2,416,856  3,728,623 

Spain6... 8,907,309  3,702,648  4,630,662 

*For  United  States  and  United  Kingdom,  gross  tons  of  2,240  pounds;  other  countries 
metric  tons  of  2,204.6  pounds. 

'Fiscal  year  ending  June  30, 1913;  calendar  years  1919  and  1920. 
»Not  available. 
^Imports  nil  or  negligible. 
'Exclusive  of  pyrites. 


72  SOME  GREAT  COMMODITIES 

before  and  after  the  war.  The  year  1913  is  chosen  for 
comparison  with  the  post-war  period  as  in  many  countries 
that  year  marked  the  culmination  of  a  period  of  steadily 
increasing  production. 

PRODUCTION  OF  PIG  IRON  AND  STEEL 

The  world's  production  of  pig  iron  between  1800  and 
1910  increased  at  an  average  of  about  60  per  cent,  in  each 
decade.  Since  1910  it  has  increased  very  little  and  the 
record  output  in  1913  has  not  been  equaled  in  the  post-war 
period.  Fundamental  changes  in  the  status  of  European 
countries  were  brought  about  by  the  redistribution  of 
territory  after  the  war. 

The  commercial  supremacy  of  steel  over  iron  is  a  de- 
velopment of  the  nineteenth  century,  for  until  the  inven- 
tion of  the  Bessemer  converter  process  in  1855,  the  only 
steel  available  was  that  made  in  small  quantities  at  high 
cost  by  the  case-hardening,  crucible  and  cementation 
processes.  The  open-hearth  furnace,  perfected  by  Siemens 
soon  after  1860,  brought  further  progress  in  the  direction 
of  economical  quantity  production,  as  it  made  possible 
the  use  of  pig  iron  smelted  from  ores  which  were  unfit  for 
the  making  of  Bessemer  pig.  By  1877  more  steel  rails 
were  made  in  the  United  States  than  iron  rails  and  as  the 
demand  for  steel  expanded  the  manufacture  of  iron  prod- 
ucts has  gradually  assumed  the  position  of  a  specialty 
business.  The  electric  steel  furnace,  introduced  at  the 
close  of  the  century,  is  used  chiefly  for  making  tool  and 
special  alloy  steels  because  of  the  exactness  with  which  its 
operation  can  be  controlled. 

An  important  economy  in  steel  manufacture  is  effected 
by  the  use  of  a  large  proportion  of  scrap  with  pig  iron  in 


IRON  AND  STEEL  73 

the  open  hearth  process.  To  this  method  is  due  the  pro- 
duction in  several  recent  years  of  an  annual  output  of  steel 
greater  than  that  of  pig  iron.  Scrap  can  also  be  used  for 
steel  making  in  the  electric  furnace.  The  utilization  of  old 
material  and  scrap  from  manufacturing  to  swell  the  vol- 
ume of  steel  is  particularly  valuable  to  industry  at  a  time 
when  the  exhaustion  of  high-grade  ore  reserves  is  in  pros- 
pect. 

The  world's  production  of  pig  iron  in  1800,  1850  and 
certain  later  years  and  steel  production  in  a  number  of 
years  beginning  with  1870  are  shown  in  table  C.  Figures 
for  1900  and  earlier  are  rough  estimates  rather  than 
exact  totals.  For  later  years  official  estimates  have  been 
used  wherever  possible  in  compiling  world  production. 
While  production  by  the  most  important  countries  is  in- 
cluded, a  world  total  is  of  necessity  only  an  approxima- 
tion. 

TABLE  C—  WORLD  PRODUCTION  OF  PIG  IRON  AND  STEEL 


Year  ***£  Iron  Steel 

(in  thousands  of  gross  tons) 

1800  .....................  825  i 

1850  .....................................  4,750  i 

1870  .....................................  11,900  692 

1900  .....................................  38,973  28,273 

1910  .....................................  65,240  59,679 

1911  .....................................  63,013  59,783 

1912  .....................................  72,258  72,137 

1913  .....................................  77,717  75,424 

1914  .....................................  59,337  59,800 

1915  .....................................  59,294  65,715 

1916  .....................................  72,121  81,847 

1917  .....................................  70,481  83,634 

1918  .....................................  64,975  76,540 

1919  .....................................  49,628  54,918 

V1920  .....................................  58,713  67,995 

1921  .....................................  35,415  40,491 


iNot  available. 


74  SOME  GREAT  COMMODITIES 

CHIEF  PRODUCING  COUNTRIES 

The  foremost  producer  of  iron  and  steel  is  the  United 
States.  This  supremacy  was  won  in  1894  when  for  the 
first  time  the  quantity  of  pig  iron  and  steel  made  in  the 
United  States  exceeded  the  production  of  the  United 
Kingdom.  Except  in  two  years  of  industrial  depression 
the  record  has  been  held  until  the  present  time.  From 
1916  to  1920  the  United  States  produced  as  much  pig  iron 
as  all  other  countries  combined.  Germany,  the  United 
Kingdom,  and  France  follow,  the  order  given  being  that 
of  standing  in  the  post-war  period. 

Belgium  and  Luxemburg  are  important  not  so  much 
for  the  bulk  of  their  output  as  for  their  relatively  large 
surplus  above  domestic  needs.  The  steel  industry  of 
Luxemburg  was  formerly  closely  connected  with  that  of 
Germany.  Austria  and  Russia  have  lost  the  pre-war  pro- 
ductivity which  represented  a  considerable  contribution 
to  the  world's  total,  although  production  in  those  countries 
was  principally  for  home  consumption.  In  the  succession 
states  of  the  Austrian  Empire  rehabilitation  of  the  iron 
and  steel  industry  is  going  forward  but  in  Russia,  so  far 
as  can  be  learned,  almost  total  paralysis  of  the  industry 
has  occurred.  Ore  exports  overshadow  Sweden's  iron 
and  steel  manufacture,  which  is  largely  given  over  to 
specialties  for  export,  while  ordinary  products  are  imported 
for  home  use.  Spain  is  trying  to  increase  the  smelting 
of  native  ores.  Canada  has  lately  reached  a  position  of 
significance  and  is  ambitious  for  the  future.  Japan,  British 
India  and  Australia  have  small  industries,  China  and  South 
Africa  still  smaller  ones  with  the  prospect  of  growth.  The 
progress  of  India's  manufacturing  may  well  be  considerable 


IRON  AND  STEEL  75 

in  view  of  the  character  and  extent  of  natural  resources. 
Italy  maintains  an  industry  by  importing  raw  materials 
and  scrap  at  heavy  cost.  In  Brazil  the  manufacture  of 
iron  and  steel  has  not  advanced  beyond  the  initial  stages. 

From  the  international  standpoint  the  chief  factors 
in  production  are  the  United  States,  United  Kingdom, 
France,  Germany  and  Belgium.  Interest  centers,  since 
the  war,  on  the  change  in  relative  position  of  France  and 
Germany  which  is  illustrated  by  the  reduced  post-war  pro- 
duction of  the  latter  shown  in  tables  D  and  E.  Through 
the  recovery  of  Lorraine  Annexee,  France  completes  her 
control  of  all  the  ore  fields  in  the  Lorraine  basin  except  the 
small  area  held  by  Luxemburg.  Lorraine  ores,  together 
with  those  of  Normandy,  Brittany,  Anjou  and  other 
districts,  place  France  next  to  the  United  States  in  ore 
reserves  and  foremost  in  all  Europe.  Fields  retained  by 
Germany  contain  known  reserves  amounting  to  about  one- 
seventh  of  the  French  reserves.  French  ore-producing 
capacity  is  theoretically  around  40,000,000  tons  annually, 
which  with  sufficient  blast  furnaces  and  fuel  would  pro- 
vide for  over  10,000,000  tons  of  pig  iron  a  year.  For  the 
present,  actual  ore  and  iron  output  are  far  below  these 
figures  and  large  ore  exports  have  disposed  of  part  of  the 
production  of  the  mines  since  the  war  as  in  pre-war  years. 
Germany's  loss  of  Lorraine,  comprising  two-thirds  of 
German  ore  reserves  and  30  per  cent,  of  her  blast  furnace 
capacity,  leaves  the  country  able  to  produce  a  maximum 
of  13,000,000  to  14,000,000  tons  of  steel  a  year  if  the  neces- 
sary foreign  ore  is  obtained.  Actual  output  from  1919  to 
1921  was  much  below  that  figure. 

The  Luxemburg  industry  is  to  some  extent  controlled 
by  French  and  Belgian  capital.  The  recent  economic 


76 


SOME  GREAT  COMMODITIES 


agreement  between  Belgium  and  Luxemburg  links  coal 
resources  of  the  former  to  the  productive  ore  fields 
of  the  latter.  In  case  the  opportunity  for  combination 
is  embraced  by  the  steel  interests  in  both  countries  they 
will  furnish  active  competition  to  Germany.  The  accom- 
panying tables  show  average  annual  production  of  iron 
and  steel  in  the  five  years  1909  to  1913  by  six  countries, 
maximum  production  in  any  year,  and  production  for  1919 
and  1920. 

TABLE  D— PRODUCTION  OF  PIG  IRON  BY  LEADING  COUNTRIES 


United  States 

M 
PRO 
Year 

1916 

AXIMXJM 

DUCTION 

Quantity 

39,434,797 
10,260,315 
16,761,311 
2,547,861 
5,207,000 
2,484,690 

1909-1913 
5-year              ]qiq 
average 
(in  tons1) 

27,488,335     31,015,364 
9,616,427        7,417,401 
14,042,243        5,654,408 
1,981,589           617,422 
4,447,600        2,412,149 
2,060,070          250,570 

1920 

36,925,987 

8,034,700 
5,550,000 
692,935 
3,433,791 
1,116,400 

United  Kingdom  

1913 

Germany. 

.  .    .      1913 

Luxemburg 

1913 

France  

1913 

Belgium.  . 

1913 

TABLE  E— PRODUCTION  OF  STEEL  BY  LEADING  COUNTRIES 


MAXIMUM 

PRODUCTION 

Year      Quantity 

United  States 1917  45,060,607 

United  Kingdom 1917  9,716,544 

Germany 1913  17,598,826 

Luxemburg...  1913  1,336,263 

France 1913  4,687,000 

Belgium 1912  2,515,040 


1919 


1920 


1909-1913 
5-year 
average 

(in  tonsi) 

27,255,645  34,671,232  42,132,934 

6,635,600  7,894,000  9,067,300 

14,469,994  6,877,398        7,710,000 

931,053  370,795     584,968 

4,203,600  2,200,000    3,050,396 

2,139,894  334,000    1,253,110 


iFigures  for  the  United  States  and  United  Kingdom  are  in  gross  tons  of  2,240  pounds:  for 
other  countries  in  metric  tons  of  2204.6  pounds. 


STEEL  MANUFACTURING 


Direct  processes  of  producing  steel  from  ore  in  a  single 
operation  are  eagerly  sought  but  their  commercial  applica- 
tion belongs  to  the  future  rather  than  the  present.  Under 
the  present  system  in  the  United  States  about  60  per  cent, 
of  the  pig  iron  output  is  delivered  in  molten  condition 


IRON  AND  STEEL 


77 


from  the  blast  furnace  to  the  converter  or  open-hearth 
furnace  to  be  made  into  steel  without  loss  of  heat.  Fuel 
saving  by  this  method  is  possible  only  to  large  industrial 
units  operating  both  blast  furnaces  and  steel  plants  and 
is  one  of  the  chief  advantages  of  mass  production.  Quan- 
tities of  pig  iron  delivered  in  molten  condition  and  by 
other  methods  are  shown  in  Table  F  covering  production 
in  the  United  States  for  the  years  1913  to  1921. 

TABLE  F— METHODS  OF  DELIVERY  OF  PIG  IRON  PRODUCED  IN  THE  UNITED 
STATES,  1913  TO  1921 


1913 
1914 
1915 
1916 
1917 
1918 
1919 
1920 
1921 


The  open-hearth  process  was  developed  in  England  and 
on  the  Continent  at  about  the  period  of  the  American  Civil 
War,  and  its  use  has  rapidly  increased  both  in  Europe  and 
in  the  United  States,  until  it  now  dominates  the  industry 
in  the  leading  steel-producing  countries.  Table  G,  sum- 
marizes, by  five-year  totals  and  by  processes,  the  produc- 
tion of  steel  in  the  United  States  from  1891  to  the  close 
of  1921.  It  will  be  seen  that,  while  82  per  cent,  of  all  the 
steel  produced  in  this  country  during  the  five  years  from 
j 1 89 1  to  1895  was  Bessemer  and  only  17  per  cent,  was  open- 
hearth  steel,  in  1921  but  20  per  cent,  was  made  by  the 
Bessemer  method  and  79  per  cent,  was  made  by  the  open- 
hearth  process. 


Iten  Condition 

16,738,708 
11,911,247 
17,108,891 
23,101,018 
23,193,439 
23,643,761 
18,217,717 
22,293,410 
9,744,475 

Sand  Cast 

6,689,680 
4,814,959 
5,076,469 
6,584,152 
6,238,567 
5,672,387 
3,962,162 
4,612,446 
998,898 

Machine  Cast    Chill  Cast 
(in  gross  tons) 

"6,522,171     1,000,171 
5,854,661       738,018 
6,969,108       740,413 
8,278,357    1,442,576 
7,649,684    1,506,394 
8,312,549    1,387,946 
7,985,710       819,554 
9,203,174       784,480 
5,736,347       195,239 

Direct 
Castings 

15,422 
13,359 
21,332 
28,694 
33,132 
38,001 
30,221 
32,477 
13,167 

Total 

30,966,152 
23,332,244 
29,916,213 
39,434,797 
38,621,216 
39,054,644 
31,015,364 
36,925,987 
16,688,126 

78  SOME  GREAT  COMMODITIES 

TABLE  G — PRODUCTION  OF  STEEL  IN  THE  UNITED  STATES  BY  PROCESSES: 
FIVE-YEAR  TOTALS,  1891  TO  1920,  AND  1921 

Per  cent,  of  Total 

Period  Open          Bessemer          All  Total          Open       Bessemer     All 

Hearth  Other  Hearth  Other 

(in  gross  tons) 

1891-1895  3,909,650  19,111,979  357,053  23,378,682  16.72  81.75  1.53 

1896-1900  11,483,114  30,275,362  441,213  42,199,689  27.21  71.74  1.05 

1901-1905  31,053,491  45,245,009  541,157  76,839,657  40.41  58.88  .71 

1906-1910  61,365,323  48,803,689  664,905  110,833,917  55.37  44.03  .60 

1911-1915  98,833,090  42,329,520  729,739  141,892,349  69.65  29.83  .52 

1916-1920  159,644,300  47,069,884  2,386,701  209,100,885  76.35  22.51  1.14 

1921  15,549,802  4,015,938  178,057  19,743,797  78.76  20.34  .90 

By  the  open-hearth  process  the  composition  of  steel 
can  be  better  controlled  than  by  the  Bessemer  method* 
The  increase  in  the  use  of  the  basic  open-hearth  process  in 
the  United  States  and  elsewhere  has  been  accelerated  by 
the  fact  that  pig  iron  for  use  in  this  method  may  vary 
widely  as  to  its  phosphorus  content,  while  the  possible 
range  of  phosphorus  content  for  pig  iron  to  be  converted 
either  by  the  acid  Bessemer  or  basic  Bessemer  process  is 
limited. 

A  very  important  feature  of  both  the  basic  and  acid 
open-hearth  processes  is  the  use  of  scrap  in  making  steel. 
By  the  acid  open-hearth  process  as  much  as  75  per  cent, 
scrap  has  at  times  been  used.  In  the  United  States, 
where  by  far  the  larger  proportion  of  steel  is  produced  by 
the  basic  open-hearth  process,  and  in  the  United  Kingdom 
it  was  formerly  believed  that  good  basic  open-hearth  steel 
could  not  be  made  if  over  50  per  cent,  of  the  charge  was 
scrap.  During  the  war  years  both  the  presence  of  large 
quantities  of  scrap  and,  in  some  countries,  a  shortage  of 
pig  iron,  greatly  stimulated  efforts  to  develop  a  technique 
by  which  the  proportion  of  scrap  to  pig  iron  used  in  the 
production  of  steel  might  be  increased.  It  has  now  been 
demonstrated  that  it  is  possible  to  use  more  than  half 
scrap  in  the  basic  open-hearth  process  with  satisfactory 


IRON  AND  STEEL  79 

results.  The  price  of  scrap  in  relation  to  cost  of  produc- 
tion of  pig  iron  will  be  a  factor  in  future  development,  but 
there  is  every  evidence  that  the  limits  of  the  use  of  scrap 
have  been  by  no  means  reached. 

The  technical  changes  which  have  taken  place  in  steel 
making  in  the  United  States  are  clearly  reflected  in  the 
ratio  between  pig  iron  output  and  steel  production.  Dur- 
ing the  five  years  from  1891  to  1895,  one  and  three-fourths 
tons  of  pig  iron,  including  non-steel-making  iron,  were 
produced  to  every  ton  of  steel.  The  ratio  of  pig-iron 
production  to  steel  output  fell  very  rapidly  during  the  last 
decade  of  the  nineteenth  century.  Since  that  time,  al- 
though the  decline  has  been  less  rapid,  it  has  been  con- 
sistent, until  in  1921  less  than  nine-tenths  of  a  ton  of  pig 
iron  for  all  purposes  was  produced  for  each  ton  of  steel. 

The  manufacture  of  pig  iron  from  ore  is  practically 
limited  to  a  single  process,  smelting  in  the  blast  furnace. 
In  the  second  stage,  from  pig  iron  to  ingots,  there  is  little 
variation;  the  two  principal  methods,  using  the  Bessemer 
converter  or  the  open-hearth  furnace,  account  for  the  bulk 
of  the  output  and  the  product  is  always  an  ingot  for 
further  working,  or  a  finished  casting.  The  tonnage  of 
ingots  and  castings  together  measures  the  output  of 
crude  steel.  After  the  ingot  stage  diversification  begins. 
Semi-finished  steel  is  in  the  form  of  blooms,  billets,  slabs, 
sheet  bars,  and  tinplate  bars,  while  all  other  rolling  mill 
products  are  known  as  finished  rolled  steel.  The  rolling 
mill  is  the  last  division  of  the  steel  industry,  as  distin- 
guished from  the  manufacturing  groups  which  produce 
locomotives  and  cars,  automobiles,  machinery  and  tools, 
etc. 

Domestic  demand  differs  widely  in  the  chief  producing 


8o  SOME  GREAT  COMMODITIES 

countries.  The  American  industry  has  at  its  very  doors 
the  greatest  market  in  the  world  for  steel.  Development 
of  this  country  as  a  manufacturing  nation  is  not  complete, 
and  iron  and  steel  are  required  for  machinery  and  for  all 
forms  of  plant  equipment  in  increasing  amounts  for  do- 
mestic uses.  Large  quantities  are  being  used  in  the  manu- 
facture of  machinery  for  the  export  trade.  The  railroad 
mileage  of  the  United  States  is  over  a  third  of  the  total 
mileage  of  the  world,  and  it  has  been  roughly  estimated 
that  consumption  by  railroads  of  the  United  States  re- 
quires from  one-sixth  to  one-third  of  the  entire  domestic 
steel  output.  The  use  of  steel  as  a  structural  material, 
especially  with  concrete,  has  been  carried  further  here  than 
in  any  other  country. 

INTERNATIONAL  TRADE 

The  international  demand,  as  distinguished  from  the 
domestic  demand,  for  iron  and  steel  is  created  by  import- 
ing countries  which  belong  to  three  main  classes.  Those 
countries  where  industrial  development  is  in  progress  but 
where  the  domestic  production  of  iron  and  steel  products 
is  not  commensurate  with  growing  needs,  are  heavy  im- 
porters. Australia,  Canada  and  Japan  are  typical  of  this 
class.  A  second  group  of  importing  countries  consists  of 
those  with  relatively  little  industrial  development.  Iron 
and  steel  and  their  manufactures,  including  machinery,  are 
frequently  among  the  leading  imports  into  countries  of 
this  group,  which  require  steel  for  railways,  for  construc- 
tion and  for  the  innumerable  needs  of  an  awakening 
economic  life.  Representative  territories  of  this  type  are 
the  Philippine  Islands,  the  Dutch  East  Indies,  and  to  a 
large  degree,  the  Argentine  Republic. 


IRON  AND  STEEL  81 

A  third  group  is  made  up  of  countries  which  are  them- 
selves large  producers.  In  the  years  preceding  the  war, 
Great  Britain  found  better  sale  for  her  iron  and  steel  in 
the  United  States  than  in  many  non-steel-producing  coun- 
tries. Germany  usually  bought  more  iron  and  steel 
products  from  her  competitor,  Great  Britain,  than  did 
British  South  Africa.  The  United  States,  while  normally 
selling  both  crude  and  manufactured  steel  to  the  United 
Kingdom,  buys  British  specialties  also. 

International  trade  in  iron  and  steel  can  be  discussed 
statistically  only  within  the  limits  imposed  by  official 
statistics  themselves.  Not  all  classes  of  commodities  are 
reported  quantitatively  and  statements  of  values  for  im- 
ports and  exports  are  rendered  useless  for  comparative 
purposes  by  the  abnormal  fluctuations  of  prices  since  1914. 
Pig  iron,  raw  steel  and  finished  iron  and  steel  are  reported 
by  quantities  in  statistics  of  most  countries,  while  frequent- 
ly values  alone  are  available  for  machinery,  tools,  imple- 
ments, certain  hardware  and  other  manufactures.  For 
this  reason  it  is  impracticable  to  discuss  international 
trade  in  machinery  and  other  manufactures,  although 
much  of  the  output  of  the  steel  industry  is  exported  in 
such  forms  as  sugar-mill  machinery  for  Cuba,  agricultural 
implements  for  Australia,  and  locomotives  for  South 
America. 

The  American  industry  has  heretofore  exported  a  smaller 
share  of  its  output  than  have  the  industries  of  Germany 
and  Great  Britain.  The  exact  ratio  between  exports  and 
total  production  is  difficult  to  determine.  It  is  estimated, 
however,  that  prior  to  the  war  American  exports  averaged 
about  8  per  cent,  of  the  total  pig  iron  production,  and 
practically  the  same  per  cent,  of  total  steel  output.  Dur- 


82  SOME  GREAT  COMMODITIES 

ing  the  war  the  proportion  of  exports  to  total  pig  iron  and 
steel  output  rose  somewhat.  In  1919,  exports  were  esti- 
mated at  about  14  per  cent,  of  all  pig  iron  produced,  and  in 
1920  and  1921,  13  per  cent. 

It  is  a  commonplace  that  Great  Britain  lives  by  foreign 
trade.  The  imported  food  supply  and  raw  materials  for 
manufacturing  are  paid  for  largely  in  textiles,  iron  and 
steel  and  coal.  In  1913  the  volume  of  exports  of  iron  and 
steel  of  all  classes  was  about  50  per  cent,  of  the  weight 
of  pig  iron  produced.  Belgian  dependence  on  foreign 
markets  was  still  greater  as  the  country's  exports  in  1913 
were  estimated  at  nearly  70  per  cent,  of  production.  Ger- 
many's exports  absorbed  over  35  per  cent,  of  production 
in  1913.  France  had  a  smaller  proportion  of  exports, 
around  20  per  cent.,  in  the  same  year. 

Raw  and  semi-manufactured  products  form  a  smaller 
total  in  foreign  trade  than  finished  iron  and  steel,  as  the 
former  can  be  utilized  only  by  countries  able  to  carry  out 
all  the  succeeding  manufacturing  processes.  The  larger 
share  of  the  trade  is  in  finished  iron  and  steel,  especially 
rails,  bridge  and  structural  iron,  plates  and  sheets,  pipes 
and  fittings,  bars  and  rods,  etc.  Under  abnormal  con- 
ditions during  the  war,  large  shipments  of  steel  ingots, 
billets  and  blooms  were  supplied  by  the  United  States  to 
England,  France  and  Italy  for  munitions,  but  normally 
exports  of  this  class  form  a  relatively  small  total. 

In  response  to  war  demands  exports  of  steel  from  the 
United  States  rose  to  unprecedented  volume  and  for  two 
years  after  the  armistice  remained  above  the  pre-war  level, 
but  in  1921  steel  exports  reflected  the  world-wide  trade 
depression.  France  alone  of  all  the  European  countries 
exported  more  iron  and  steel  after  the  war  (1920  and  1921) 


IRON  AND  STEEL 


than  in  1913.  British  exports  from  1914  to  1921  were 
much  smaller  than  in  1913,  German  foreign  trade  was  im- 
proving to  some  extent  in  1920  and  1921,  while  at  the  same 
time  Belgian  trade  reached  about  half  the  volume  of  ex- 
ports maintained  before  the  war.  Although  the  foreign 
trade  statistics  of  the  five  countries  do  not  afford  an  ex- 
act basis  of  comparison,  the  following  table,  showing  total 
exports  of  iron  and  steel  (not  including  machinery)  so  far 
as  they  are  reported  by  weight,  will  serve  as  an  indication 
of  the  position  of  each  country  in  1913  and  from  1919  to 
1921. 

TABLE  H— EXPORTS  OF  IRON  AND  STEEL  BY  PRINCIPAL  COUNTRIES 

1913       1919       1920         1921 


1919       1920 
(in  tons1) 


United  States 3,018,500 

United  Kingdom 4,933,704 

Germany 6,497,262 

France 1,144,946 

Belgium 1,722,720 


4,399,699 
2,232,844 

2 

397,394 
176,770 


4,935,136 
3,251,225 
1,750,601 
1,385,898 
923,063 


2,213,378 
1,700,407 
n,631,948 
2,266,633 
995,836 


^United  States  and  United  Kingdom,  gross  tons  of  2,240  pounds;  other  countries,  metric 
tons  of  2,204.6  pounds. 
2Not  available. 
sFigures  for  May  to  December  only;  other  months  not  available. 

The  increase  in  American  exports  during  the  war  years 
was  due  primarily  to  the  furnishing  of  materials  for  muni- 
tions and  supplies  to  the  belligerent  countries,  and  secon- 
darily, to  expansion  of  trade  with  Far  Eastern  and  South 
American  markets.  To  a  limited  extent  American  iron 
and  steel  supplied  the  deficiency  of  European  goods  in 
those  markets.  The  contraction  of  British  exports  seri- 
ously affected  many  of  Great  Britain's  foreign  markets 
and  up  to  the  close  of  1921  no  great  progress  had  been 
made  in  regaining  the  pre-war  volume  of  trade.  A  de- 


84  SOME  GREAT  COMMODITIES 

termined  effort  was  made  to  maintain  the  supplies  usually 
sent  to  British  dominions,  but  nevertheless,  exports  to 
British  possessions  fell  from  an  average  of  about  1,950,000 
tons  in  the  five  years  1909-13  to  about  900,000  tons  in 
1914-18.  The  change  in  distribution  of  British  exports 
from  1909  to  1920  (the  latest  year  for  which  exports  by 
countries  are  available)  is  shown  in  table  I,  and  the  pre-war 
and  post-war  distribution  of  representative  products  in 
American  export  trade  is  given  in  table  J. 

International  trade  is  influenced  primarily  by  prices, 
secondarily  by  other  factors,  such  as  terms  of  sale,  ship- 
ping connections  etc.  Since  the  excessive  depreciation  of 
Continental  currencies  makes  comparisons  involving 
French  and  German  prices  worthless,  the  following  table 
includes  only  prices  of  American  and  British  products, 
involving  the  smaller  degree  of  decline  in  sterling  exchange 
since  the  war.  The  prices  quoted  are  for  sales  in  the 
domestic  market  in  each  country,  as  no  standard  and  uni- 
form quotations  for  prices  in  export  trade  are  available. 

The  world  was  making  and  using  steel  in  1913  at  the 
rate  of  about  75,000,000  tons  a  year.  In  the  four  years 
which  followed,  industries  strained  to  produce  their  max- 
imum output,  much  of  which  was  reduced  to  scrap  and 
rust.  In  1919  and  1920  production  amounted  to  less  than 
70,000,000  tons  and  in  1921  declined  to  about  40,000,000 
tons.  This  indicates  not  so  much  reduced  needs  as 
reduced  purchasing  power  and  world-wide  depression 
which  rendered  normal  replacements  and  extensions  im- 
possible. 

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productive  capacity  since  1913  in  relation  to  the  world's 
normal  requirements  for  iron  and  steel.  The  temporary 


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IRON  AND  STEEL  89 

advantage  in  the  international  market  enjoyed  by  some 
countries  as  a  result  of  the  exchange  factor  is  gradually  dis- 
appearing, and  competition  will  again  be  on  the  basis  of 
cost  of  production  and  quality  of  service  to  foreign  cus- 
tomers. 


LUMBER 

THE  forest  lands  of  the  world,  according  to  the 
latest  estimates,  amount  to  about  4,020,000,000 
acres,  or  24  per  cent,  of  the  total  land  area.  This 
does  not  include  the  forests  of  China,  Korea,  and  the  larger 
part  of  South  America  and  Africa,  for  which  even  fair 
estimates  are  lacking.  All  figures  for  forest  lands,  how- 
ever, are  more  or  less  approximations.  For  Europe  only 
can  data  be  regarded  as  fairly  accurate;  but  this  accuracy 
does  not  extend  to  Russian  figures.  Table  A  shows  as 
far  as  data  are  available  the  location  of  the  main  forest 
areas  of  the  world.  Political  designations  are  those  of 
1910. 

TIMBER  CLASSIFICATION 

Mere  acreage,  however,  is  not  the  sole  determining  fac- 
tor of  a  country's  position  as  to  timber  supply,  for  all  woods 
are  not  equally  workable  or  serviceable.  Thus,  although 
large  areas  of  Africa,  South  America  and  Australia  are 
under  heavy  tropical  forests,  they  produce  mainly  hard, 
dense,  heavy  woods  unsuitable  as  lumber  for  general  pur- 
poses and  suited  only  for  limited  specialized  uses. 

Trees  from  which  timber  of  commercial  value  is  obtained 
are  of  two  broad  classes :  coniferous  or  cone-bearing  trees, 
and  hardwood  or  broadleaf  trees.  The  former  comprise 
what  are  ordinarily  called  softwoods,  the  principal  species 
being  the  pines,  spruce,  fir,  hemlock,  larch,  tamarack, 
cedar,  cypress  and  redwood.  They  may  invariably  be 

90 


LUMBER  91 

TABLE  A— DISTRIBUTION  OF  FOREST  AREAS  OF  THE  WORLD  IN  1910 


Country 


Total  forest  area 
(in  millions  of  acres) 


EUROPE 

Austria-Hungary 53 

Finland 53 

France 24 

Germany 35 

Norway 17 

Russia  in  Europe 465 

Sweden 49 

Other  countries 54 

Total  Europe 750" 

ASIA 

India 149 

Japan 58 

Philippines 49 

Russia  in  Asia 348 

Other  countries 7 

Total  Asia 611 

AUSTRALIA 133 

AFRICA 

Central  Africa 224 

Madagascar 25 

Other  countries 10 

Total  Africa 259 

AMERICA 

Alaska 107 

Canada 799 

Mexico 25 

South  America  (tropical) 528 

United  States 545 

West  Indies 43 


Total  America 2,047 

Grand  total 3,800 

recognized  by  their  needle  leaves,  resinous  bark  and  cones, 
and  in  almost  every  case  are  evergreens.  They  are  usually 
soft  and  light,  from  which  qualities  they  derive  the  name 
softwoods.  The  broadleaf  trees  are  the  hardwoods,  de- 
riving the  name  from  the  fact  that  as  a  class  they  are 


92  SOME  GREAT  COMMODITIES 

heavier  and  harder  than  the  softwoods,  although  there 
is  a  certain  degree  of  overlapping  of  these  qualities  between 
the  two  groups.  Poplar  and  basswood,  for  instance,  are 
neither  heavy  nor  hard,  but  are  termed  hardwoods. 

FOREST  RESOURCES  OF  LEADING  COUNTRIES 

Russia  in  Europe  and  in  Asia  contains  almost  half  the 
world's  timber  stands  of  commercial  species.  So  far,  how- 
ever, the  Russian  lumber  industry  has  developed  in  Euro- 
pean Russia,  as  there  has  been  only  an  insignificant  ex- 
ploitation of  the  forests  of  Siberia.  Although  the  esti- 
mated forest  area  of  European  Russia  is  nearly  500,000,000 
acres,  the  timber  area  is  somewhat  less  than  300,000,000 
acres,  because  of  reductions  that  must  be  made  for  waste 
land,  swamps,  etc.  Russia  possesses  vast  coniferous  for- 
ests and  also  large  forests  of  hardwoods,  mainly  oak, 
poplar,  elm  and  ash.  At  the  beginning  of  the  war  the  Rus- 
sian lumber  industry  had  little  more  than  started,  the 
total  cut  of  its  sawmills  being  about  eleven  billion  feet, 
compared  with  an  American  cut  at  that  time  of  over  forty 
billion.  However,  there  was  a  large  local  lumber  business 
that  did  not  go  through  the  sawmills,  and  which  thus  did 
not  appear  in  the  figures  for  the  Russian  cut. 

Before  the  war  Austria-Hungary  was  one  of  the  most 
important  lumber-producing  countries  in  the  world.  The 
annual  cut  of  its  forests,  which  were  nearly  all  under  care- 
ful management,  amounted  to  about  2,827,000,000  cubic 
feet.  The  political  dissolution  of  the  empire,  however, 
and  the  economic  disorganization  resulting  have  demoral- 
ized the  industry,  which  will  probably  not  be  able  to  reach 
its  pre-war  efficiency  for  a  considerable  time. 

It  has  been  estimated  that  the  total  area  of  commer- 


LUMBER 


93 


cially  valuable  timber  in  Canada  lies  somewhere  between 
200,000,000  and  300,000,000  acres  and  contains  a  stand 
of  from  500,000,000,000  to  800,000,000,000  board  feet. 
This  has  been  cut  into  lumber  during  the  last  ten  years 
at  an  average  rate  of  about  4,000,000,000  feet  board  meas- 
ure per  annum,  with  smaller  cuts  for  the  preceding  years. 
Table  B  shows  the  lumber  production  in  Canada  from 
1908  to  1920. 


TABLE  B— LUMBER  PRODUCTION  IN  CANADA,  1908  TO  1920 


Year 


M  board  feet 


1908 3,348,176 

1909 3,814,942 

1910 4,901,649 

1911 4,918,202 

1912 4,389,723 

1913.  . . . 3,816,642 

1914 3,946,254 

1915 3,842,676 

1916 3,490,550 

1917 4,151,703 

1918 3,886,631 

1919 3,830,831 

1920.} 4,302,625 

TABLE  C — LUMBER  CUT  OF  CANADA  BY  SPECIES 

Species                                                1913               1918                 1919  1920 

(M  board  feet) 

Spruce 1,274,216    1,142,777    1,335,044  1,490,098 

Douglas  fir 793,143       715,812       817,844  901,915 

White  pine 678,330       808,652       479,937  641,687 

Hemlock 306,342       273,356       234,785  319,592 

Red  pine 144,320       102,105         89,198  96,253 

Cedar 101,053       130,228        98,808  197,004 

Tamarack 96,325        77,135         16,490  73,891 

Balsam  fir 64,957         94,774       140,834  132,390 

Hardwoods 263,613       201,667       196,066  254,883 

All  other 94,343       340,125       421,825  194,912 

Total 3,816,642    3,886,631    3,830,831  4,302,625 

Of  the  softwoods,  spruce,  Douglas  fir,  white  pine,  hem- 
lock, cedar  and  balsam  fir,  which  predominate  in  Canada's 


94 


SOME  GREAT  COMMODITIES 


timber,  spruce  is  the  most  important  and  is  the  chief 
source  for  the  manufacture  of  wood  pulp.  Table  C  gives 
the  lumber  cut  of  Canada  by  species  for  1913,  1918,  1919 
and  1920. 

British  Columbia,  Ontario  and  Quebec  have  the  greatest 
quantities  of  standing  timber,  the  central  provinces  being 
largely  treeless  prairies.  Table  D  shows  Canada's  lumber 
cut  by  provinces  for  1913  and  from  1918  to  1920. 


TABLE  D — LUMBER  CUT  OF  CANADA  BY  PROVINCES 

Province  1913  1918  1919 

(M  board  feet) 


1920 


British  Columbia.  . 

1  173  647 

1  157  636 

1  175  151 

1443270 

Ontario.              .     ... 

1,101,066 

1,110,062 

940199 

992901 

Quebec  

.  .  .      630,346 

841,084 

884,612 

916  422 

New  Brunswick  

399,247 

442,625 

497,593 

515785 

Nova  Scotia 

274  722 

176  332 

225  074 

273  987 

Saskatchewan  . 

114,800 

75,835 

42,452 

54371 

Manitoba  

71,961 

54,047 

30,353 

58419 

Alberta  

44,462 

22,388 

26,173 

41,229 

Prince  Edward  Island. 

6391 

6393 

8971 

6241 

Yukon.  .  . 

229 

253 

Total 3,816,642    3,886,631    3,830,831    4,302,625 

The  United  States  originally  possessed  approximately 
822,000,000  acres  of  timberland  estimated  to  contain 
5,200,000,000,000  board  feet  of  saw  timber,  of  which  about 
463,000,000  acres  containing  2,215,000,000,000  feet  remain. 
Of  the  amount  removed  about  one-third  has  been  lum- 
bered, one-third  destroyed  by  forest  fires  and  one-third 
wasted.  The  remaining  virgin  stands  consist  chiefly  of 
various  species  of  hardwoods  in  the  Central  and  Southern 
hardwood  regions,  the  yellow  pine  along  the  South  Atlantic 
and  Gulf  coasts,  and  the  Douglas  fir,  spruce  and  cedar 
of  the  far  Northwest,  with  smaller  stands  of  redwood, 
California  sugar  and  white  pine,  western  yellow  pine  and 


LUMBER  95 

Idaho  white  pine  in  the  Inland  Empire  region,  the  white 
pine  in  northern  Minnesota  and  Wisconsin  and  spruce  in 
Maine.  Table  E  on  page  96  shows  the  distribution  of 
American  standing  timber  by  species  and  regions. 

The  American  lumber  cut,  which  is  several  times  that 
of  any  other  country,  reached  its  maximum,  46,000,000,000 
feet,  in  1906  and  1907.  The  total  production  of  wood  for 
all  purposes  including  fire  wood,  pulp  wood,  etc.  is  known 
to  be  very  much  larger  than  the  lumber  cut,  but  statistics 
are  not  available.  Table  F  shows  the  estimated  total  cut 
of  lumber  in  the  United  States  from  1904  to  1920. 

TABLE  F— LUMBER  PRODUCTION  IN  THE  UNITED  STATES,  1904  to  1920 

Year  M  board  feet 

1904 43,000,000 

1905 43,500,000 

1906 46,000,000 

1907 46,000,000 

1908 42,000,000 

1909 44,500,000 

1910 44,500,000 

1911 43,000,000 

1912 45,000,000 

1913 44,000,000 

1914 40,500,000 

1915 38,000,000 

1916 40,000,000 

1917 36,000,000 

1918 32,000,000 

1919 34,550,000 

1920 33,799,000 


HISTORY  OF  INDUSTRY  IN  THE  UNITED  STATES 

One  hundred  years  ago  lumbering  in  the  United  States 
was  confined  to  small  sawmills  on  the  coast  and  river 
courses  of  the  East.  Except  for  a  small  export  trade  the 
markets  supplied  were  entirely  local.  Transportation  was 
almost  entirely  by  waterways.  Although  various  "up- 


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LUMBER  97 

and-down"  sawmills  were  established  on  the  Penobscot, 
Hudson  and  Delaware  rivers  early  in  the  nineteenth 
century,  the  average  sawmill  up  to  1880  was  a  small 
affair. 

As  the  Middle  West  became  settled  and  railway  trans- 
portation developed,  the  center  of  lumber  manufacture 
shifted  to  the  region  of  the  Great  Lakes.  The  famous 
white  pine  industry  of  the  lake  states  began  about  1850 
and  did  not  decline  until  the  end  of  the  eighties.  The 
golden  age  of  northern  white  pine  was  reached  in  1870  in 
the  State  of  Michigan.  The  lake  states  industry  differed 
from  the  former  industry  of  the  eastern  coast  in  being 
organized  and  capitalized  on  a  large  scale.  It  catered 
principally  to  the  eastern  and  central  markets. 

As  the  white  pine  industry  declined  toward  the  end  of 
the  century,  owing  to  depletion  of  the  virgin  forest,  the 
lumber  market  was  diverted  to  pine  from  the  southern 
states.  In  the  eighties  and  early  nineties  southern  pine 
first  extended  beyond  local  consumption.  Owing  to  co- 
operation from  the  new  railroads  in  the  South,  it  became 
possible  to  supply  the  eastern  and  central  markets  of 
the  United  States  with  southern  pine  lumber.  Central, 
eastern  and  southern  parts  of  the  United  States  depend 
mainly  on  the  southern  forests  for  their  lumber,  but  in  the 
course  of  a  few  years  the  southern  pine  industry  will  be 
able  to  supply  only  local  consumption  from  its  bits  of 
virgin  timber  and  second  growth.  The  eastern  and  lake 
forests  have  had  a  similar  history. 

The  lumber  industry  of  the  Pacific  coast,  which  has  come 
to  be  important  since  1900,  is  the  large  American  industry 
of  the  future.  Of  the  total  available  timber  supply,  over  50 
per  cent,  is  estimated  to  be  in  the  Pacific  Northwest. 


98  SOME  GREAT  COMMODITIES 

Douglas  fir  is  becoming  important  on  the  Atlantic  coast 
and  is  sold  extensively  in  the  central  market.  The  terri- 
tory from  the  Pacific  coast  eastward  to  the  Missouri  River 
and  southward  to  western  Kansas  is  now  almost  entirely 
dependent  on  the  west  coast  mills  for  its  lumber  supply. 
The  tendency  is  to  extend  eastward  and  southward.  How- 
ever, for  some  time  to  come  southern  yellow  pine  will 
predominate  in  the  central  and  eastern  markets. 

DEVELOPMENT  IN  FOREIGN  COUNTRIES 

Because  of  their  vast  timber  resources  Russia,  Canada 
and  the  United  States  have  been  unusually  wasteful  of 
their  forests.  The  dense  population  of  the  western  Euro- 
pean countries,  on  the  other  hand,  with  the  consequent 
reduction  of  forest  areas,  has  made  efficient  forestry  neces- 
sary there.  In  this  regard  Germany  stood  first,  closely 
followed  by  France,  Austria-Hungary,  Denmark,  Belgium, 
Switzerland,  Norway,  Sweden  and  Finland. 

The  forest  resources  and  the  lumber  industry  of  Norway, 
Sweden  and  Finland  are  of  great  importance  particularly 
from  the  standpoint  of  the  international  market.  Al- 
though the  lumber  is  not  naturally  of  such  good  quality  as 
that  from  the  United  States  and  Canada,  the  methods  of 
manufacturing  are  superior.  Baltic  products  are  gener- 
ally better  sawed  and  planed.  The  material  is  carefully 
inspected  and  graded,  is  ordinarily  seasoned  for  six  months 
before  shipment,  and  is  usually  branded.  In  Sweden,  as 
the  prosperity  of  the  country  is  considered  to  be  contin- 
gent to  a  large  degree  upon  the  existence  of  the  forests, 
stringent  laws  against  the  depletion  of  timberlands  have 
been  enacted.  Extreme  care  is  taken  in  the  sawmills  to 
prevent  the  waste  of  even  the  smallest  piece  of  lumber 


LUMBER  99 

and  close  cooperation  exists  among  producers.  Swedish 
wood  production  is  reported  in  cubic  feet,  and  under 
normal  pre-war  conditions  was  about  950,000,000  cubic 
feet  per  year.  Norway  annually  cuts  about  345,000,000 
cubic  feet.  Heavy  inroads  were  made  during  the  war  on 
the  timber  stands  and  available  stocks  of  lumber  of  Nor- 
way and  Sweden  by  the  large  demands  of  the  warring 
countries.  For  the  immediate  future  in  European  inter- 
national trade  the  Finnish  lumber  industry  is  now  the 
most  important.  Finnish  forests  are  composed  almost 
exclusively  of  pine,  spruce,  birch  and  to  some  extent  alder, 
the  most  valuable  species  being  pine.  Forestry  is  con- 
ducted on  a  modern,  scientific  basis.  Although  less  than 
50  per  cent,  of  the  timber  is  government  owned,  the  timber 
stands  cannot  be  depleted,  and  cutting  is  done  gradually 
so  that  the  new  timber  grown  annually  is  always  at  least 
equal  to  the  annual  cut. 

INTERNATIONAL  TRADE 

With  regard  to  trade  in  lumber,  countries  may  be  divided 
into  five  classes.  First  are  those  countries  such  as  Russia, 
Canada  and  the  United  States  which  export  more  than 
they  import.  Second  are  those  countries  which,  with  a 
highly  developed  forest  management  and  important  forest 
possessions,  themselves  produce  much  wood  but  none  the 
less  have  to  import  foreign  wood  to  meet  the  requirements 
of  their  industries.  Such  countries  were  the  German 
Empire  before  the  war,  France,  Switzerland  and  Belgium. 
The  third  group  comprises  countries  in  which  forest  man- 
agement plays  but  a  small  part  on  account  of  the  small 
forest  area,  representative  countries  being  Great  Britain, 
the  Netherlands,  Denmark  and  South  Africa.  Fourth 


joo          SOME  GREAT  COMMODITIES 

are  countries  with  only  slightly  developed  forest  manage- 
ment and  little  wood  consumption,  such  as  Italy,  Spain, 
Portugal  and  Greece.  The  fifth  group  comprises  countries 
with  relatively  large  forest  areas  which  are  in  large  part 
not  yet  fully  developed,  are  unequally  distributed  or  are 
poorly  managed.  In  this  group,  for  example,  are  Serbia, 
Bulgaria,  the  South  American  countries  and  the  West 
Indies. 

Countries  which  import  their  main  timber  and  lumber 
supply  may  export  small  quantities  of  wood  valued  for 
special  uses,  while  those  countries  on  which  the  world  de- 
pends for  its  wood  usually  import  kinds  not  produced  by 
their  own  forests.  In  the  case  of  the  United  States,  how- 
ever, as  more  than  80  per  cent,  of  the  lumber  imports  are 
from  Canada,  this  trade  does  not  differ  essentially  from 
domestic  business.  Importations  from  countries  other 
than  Canada,  though  not  large  in  volume,  are  high  in  value, 
and  consist  chiefly  of  fine  cabinet  woods  not  found  in 
Canada  or  the  United  States.  Of  these  woods  mahogany 
comes  principally  from  Central  America,  Mexico  and 
British  West  Africa  and  cedar  from  Cuba,  Mexico  and 
Brazil.  Briar  wood  is  imported  from  France,  Italy  and 
French  Africa. 

The  chief  lumber-exporting  countries  before  the  war 
were  Russia,  including  Finland,  Austria-Hungary,  Sweden, 
Norway,  Canada  and  the  United  States.  Table  G  shows 
approximate  net  exports  from  the  leading  exporting  coun- 
tries for  1913.  Because  of  the  political  realignments  in 
Europe  following  the  war,  later  comparable  data  are  not 
available. 

Before  the  war  Russia  was  the  principal  source  of  im- 
ported lumber  for  western  European  countries.  Sixty- 


LUMBER  101 

TABLE  G— NET  EXPORTS  OF  LUMBER  FROM  THE  CHIEF  EXPORTING 
COUNTRIES  IN  1913 

Net  exports 
(in  millions  of  feet) 

Russia 7,500 

Austria-Hungary 3,800 

Sweden 3,300 

Finland 2,600 

Canada 2,200 

United  States 1,700 

five  per  cent,  of  the  output  was  for  export,  the  majority 
of  the  sawmills  being  in  the  port  cities.  In  1913  Russia 
exported  7,500,000,000  feet  of  lumber,  one-third  of  which 
went  to  Germany,  one-third  to  the  United  Kingdom,  one- 
sixth  to  Holland  and  the  rest  mainly  to  other  European 
countries.  According  to  recent  reports,  however,  only  a 
small  fraction  of  the  domestic  demand  at  present  is  being 
supplied  and  it  will  probably  be  many  years  before  Russia 
can  regain  any  substantial  part  of  her  former  importance 
in  the  world's  markets. 

Austria-Hungary  before  the  war  was  second  only  to 
Russia  as  an  exporter  of  lumber.  Its  exports  showed  a 
steady  increase,  but  even  if  the  disorganization  resulting 
from  the  war  had  not  occurred,  the  increase  would  prob- 
ably not  have  continued  for  long;  annual  cut  was  greater 
than  annual  growth,  and  owing  to  the  country's  forestry 
policy  its  productivity  was  capable  of  only  limited  increase. 
Of  exports  from  Austria-Hungary  before  the  war,  one- 
half  went  to  Germany  and  about  one-fourth  to  Italy. 

Of  Sweden's  exports  of  more  than  3,000,000,000  feet 
per  year,  the  United  Kingdom  has  been  accustomed  to 
take  nearly  one-half,  the  remainder  being  distributed 
among  other  western  European  countries.  Exports  from 
Finland  have  been  distributed  in  about  the  same  way. 


102          SOME  GREAT  COMMODITIES 

More  than  two-thirds  of  Canadian  exports  go  to  the  United 
States,  and  most  of  the  remainder  is  sent  to  the  United 
Kingdom. 

The  other  regions  of  the  world  are  lacking  in  lumber- 
cutting  development,  and  do  not  contain  the  common 
softwoods,  which  are  the  chief  staple  timber  product  of 
international  trade.  Central  and  South  American  coun- 
tries now  depend  upon  the  United  States,  Canada  and 
Sweden  for  most  of  their  softwoods  and  are  not  likely  to 
be  factors  as  exporters  for  many  years  to  come,  if  ever. 
Africa  does  not  yet  supply  its  own  needs.  China  is  be- 
coming an  increasingly  large  importer.  Japan  does  little 
more  than  supply  its  own  requirements.  Australia  and 
New  Zealand  are  now  forced  to  import  lumber  from  the 
United  States  and  Canada. 

EXPORTS  FROM  THE  UNITED  STATES 

Though  American  lumber  exports  have  a  wider  distri- 
bution through  the  world  than  the  lumber  of  any  other 
country,  a  comparatively  small  proportion  of  United 
States  lumber  has  been  exported.  The  average  annual 
gross  exports  of  lumber  in  the  five  years  just  preceding  the 
war  amounted  to  2,221,000,000  board  feet,  in  compari- 
son with  the  total  average  cut  during  these  years  of 
44,200,000,000  feet.  Though  Canada  and  the  United 
Kingdom  are  the  largest  single  customers,  it  is  the  heavy 
importation  of  Canadian  lumber  into  the  United  States 
which  reduces  the  American  gross  timber  and  lumber  pre- 
war export  figure  of  nearly  4,000,000,000  feet  to  net  ex- 
ports of  less  than  2,000,000,000  feet.  Table  H  shows 
American  exports  of  short  lumber,  i.e.,  boards,  planks, 
scantlings,  etc.,  for  the  average  of  the  three  fiscal  years 


LUMBER 


103 


from  July  I,  1911,  to  June  30,  1914,  and  for  the  calendar 
years  1919,  1920  and  1921. 


TABLE  H— EXPORTS  OF  SAWED  LUMBER  FROM  THE  UNITED  STATES  BY 

SPECIES  FOR  THE  FISCAL  YEARS  ENDING  JUNE  30, 1912  TO  1914,  AND 

CALENDAR  YEARS  1919,  1920  AND  1921 


Species 


1912-141 
(3-yr.  average) 


Pine: 

White 

Yellow: 

Pitch  (longleaf) 853,445 

Shortleaf 37,325 

Allother 208,857 

Total  pine 1,146,207 


1919  1920 

(M  board  feet) 


Fir. 
Oak 

Gum.  .  . . 
Redwood. 
Poplar. . . 
Spruce.  . 
Cypress.  . 
Allother. 


Total 


),944 


437,773 

637,152 

19,884 

16,167 

69,865 

104,778 

551,758 

796,829 

301,144 

451,223 

157,937 

105,141 

72,330 

27,266 

34,211 

45,006 

35,645 

19,224 

21,685 

21,862 

14,865 

10,952 

121,635 

73,855 

,311,210 

1,551,358 

1921 


'46,580         24,236         38,732         14,793 

432,736 
3,905 
77,410 
528,844 

658,298       301,144       451,223       455,233 
247,143       157,937       105,141         68,600 
71,550         72,330         27,266         27,634 
259,529         34,211         45,006         15,892 
30,539         35,645         19,224  9,702 

18,516         21,685         21,862  7,195 

214,443         14,865         10,952  4,993 

214,719       121,635         73,855         86,724 


1,204,817 


include  joists  and  scantlings. 
Two-year  average. 


Yellow  pine,  fir  and  oak  constitute  together  about  four- 
fifths  of  the  total  exports.  Southern  yellow  pine,  con- 
sisting chiefly  of  longleaf  pine  but  including  also  shortleaf, 
loblolly,  rosemary,  slash  and  other  yellow  pines,  is  ex- 
ported principally  to  western  Europe,  the  West  Indies, 
the  east  coast  of  South  America  and  eastern  Canada. 
Douglas  fir  goes  mainly  to  Australia,  South  Africa,  Mexico, 
the  west  coast  of  South  and  Central  America  and  the 
Orient.  Oak  is  sent  to  all  parts  of  the  world,  particularly 
to  western  Europe  and  Canada. 

Although  Russia  and  Siberia  probably  will  prove  even- 


104          SOME  GREAT  COMMODITIES 

tually  to  be  the  keenest  competitors  of  the  American  lumber 
industry,  the  Scandinavian  countries,  including  Finland, 
are  the  only  countries  besides  Canada  which  can  at  present 
offer  much  competition  to  the  United  States  in  the  inter- 
national market.  The  principal  advantages  of  the  Scan- 
dinavian and  Finnish  exporters  of  lumber  are  superior 
shipping  facilities  through  native-owned  tonnage,  efficient 
marketing  systems,  cooperation  among  exporters,  close 
connections  between  exporters  and  importers,  proximity 
to  the  principal  markets,  elimination  of  many  middlemen 
and  established  reputation.  Canada  will  always  be  a 
competitor  of  the  United  States  as  a  lumber  exporter,  but 
on  account  of  its  smaller  production  cannot  export  on  as 
large  a  scale  as  the  United  States. 

For  the  United  States,  however,  to  increase  its  exports 
of  southern  yellow  pine  before  the  pine  land  best  suited  to 
growing  this  timber  is  placed  on  a  permanent  producing 
basis  is  a  policy  open  to  question.  There  is  an  increasing 
demand  on  the  softwood  forests  of  the  Pacific  Northwest 
as  the  end  of  the  present  stand  of  southern  yellow  pine 
and  the  eastern  white  pine  comes  in  sight,  and  if  there  is 
much  further  increase  of  United  States  exports  of  Douglas 
fir,  western  white  pine,  sugar  pine,  western  yellow  pine 
and  other  softwoods  it  will  seriously  diminish  the  future 
domestic  supply  of  raw  materials.  Likewise,  in  the  hard- 
wood industry  there  is  danger  of  exporting  more  than  the 
surplus  over  and  above  domestic  needs.  Although  this 
country  possesses  more  valuable  hardwood  timber  than  any 
other  temperate  region  in  the  world  and,  with  the  possible 
exception  of  the  Carpathian  region  of  eastern  Europe, 
the  largest  temperate  zone  supply,  yet  the  exportation 
of  raw  material  for  European  furniture  factories  and 


LUMBER  105 

other  wood-using  industries  might  in  the  future  cause 
American  industry  to  go  without  or  to  pay  excessive 
prices. 

At  present  the  timber  supply  of  the  world  outside  of 
the  tropics  is  being  used  more  rapidly  than  it  is  being 
renewed  by  growth.  In  the  United  States  the  annual 
timber  growth  is  about  one-third  of  the  annual  cut  and  the 
oncoming  growth  is  ordinarily  of  inferior  species  and  grade. 
On  this  account  the  lumber  export  business  of  the  United 
States  cannot  be  permanently  enlarged  without  detriment 
to  the  national  welfare  until  provision  has  been  made 
which  will  secure  a  renewal  of  the  forests  of  this  country 
by  the  practice  of  scientific  forestry.  Heavy  export  sales 
of  United  States  timber  would  mean  that  this  nation, 
which  is  the  largest  wood-using  country  in  the  world, 
would  be  obliged  to  secure  its  timber  supplies  in  a  world 
market  of  increasing  scarcity.  If  such  a  situation  de- 
veloped, a  drastic  readjustment  would  be  required,  for 
the  majority  of  the  dwellings  and  farm  buildings  in  this 
country  are  made  of  wood  and  more  than  half  the  total 
domestic  consumption  is  used  for  construction.  By  prac- 
tical forestry  methods,  however,  it  would  be  possible  to 
produce  in  the  United  States  in  the  next  half  century  an 
annual  cut  of  many  billion  feet  of  lumber  for  export  after 
meeting  the  demand  for  domestic  needs  without  depleting 
the  standing  timber  supply. 

ORGANIZATION  OF  UNITED  STATES  LUMBER  INDUSTRY 

In  the  past  the  lumber  industry  of  the  United  States 
has  been  characterized  by  violent  and  destructive  competi- 
tion between  different  regions  and  between  different  mills 
in  the  same  region,  and  speculative  manipulation  of  timber 


106          SOME  GREAT  COMMODITIES 

ownership  produced  sudden  fluctuations  in  both  output 
and  price.  Lack  of  sensitive  adjustment  of  supply  to 
demand  has  developed  the  lumber  industry  to  such  an 
extent  that  it  is  equipped  to  produce  substantially  in  ex- 
cess of  normal  consumption. 

The  organization  of  the  lumber  industry  comprises  five 
successive  functions  which  are  carried  out  in  great  diver- 
sity of  combination  by  industrial  units.  These  functions 
are  the  ownership  or  control  of  standing  timber,  logging, 
manufacturing  of  lumber,  wholesale  distribution  and  re- 
tail distribution.  The  most  common  industrial  unit  com- 
bines the  first  three  functions,  and  often  undertakes  the 
distribution  of  its  own  lumber  to  the  retailer,  or  even  to  the 
ultimate  consumer.  The  lumber  manufacturer  ordinarily 
owns  his  timber.  There  has  been  a  recent  tendency  toward 
consolidation  of  holdings  in  large  tracts,  which  points  to 
central  control  of  the  industry.  Owing  to  the  policy 
of  the  Government  in  selling  its  timberlands,  there  has 
been,  since  1870,  a  vast  speculative  purchase  of  timberland 
far  in  advance  of  any  possible  use  of  the  timber.  Hence, 
it  is  generally  recognized  that  the  big  profit  in  the  North- 
west, and  also  to  a  great  degree  in  the  South,  has  not  been 
in  lumber  manufacturing  but  in  the  increase  in  the  value 
of  timberlands. 

In  certain  regions  logging,  including  the  felling  of  timber 
and  cutting  it  into  suitable  lengths  for  the  sawmills  and 
delivery  of  the  logs  by  rail  and  water,  has  been  a  distinct 
industry.  However,  the  majority  of  lumber  manufac- 
turers have  their  own  logging  crews.  In  the  early  period 
o£  lumbering,  there  were  separate  companies  of  river 
"drivers." 

The  technical  processes  of  sawing  and  marketing  lumber 


LUMBER  107 

in  the  United  States  have  been  highly  developed  in  the 
last  fifty  years.  River  drives  have  been  superseded  in 
the  southern  and  lake  states,  principally  through  tempo- 
rary logging  railroads  or  tap  lines  built  into  the  woods. 
The  most  efficient  modern  methods  have  been  introduced 
in  the  Pacific  Northwest,  the  evolution  being  due  largely 
to  the  increasing  inaccessibility  of  timber. 

In  contrast  to  the  enormous  mills  cutting  virgin  timber 
in  the  Northwest  and  other  parts  of  the  country  are  the 
small  mills  which  take  over  the  lumber  industry  of  a  region 
after  the  original  timber  has  been  largely  cut  away. 
The  result  is  a  great  diversity  in  the  size  and  character  of 
American  lumber  mills.  There  is  every  variety  and  style 
of  sawmill,  from  the  little  stationary  plant  with  sash  saw, 
worked  up  and  down  by  water  power,  to  the  large  plant 
with  its  complement  of  main  and  secondary  kilns  and 
planers,  which  may  turn  out  250,000  feet  of  lumber  every 
day.  Mills  classified  as  having  an  output  of  from  50,000 
to  499,000  feet  a  year  comprise  about  two-thirds  of  the 
total  mills  of  the  country.  However,  the  largest  mills, 
those  having  an  output  of  10,000,000  feet  or  more  a  year, 
though  they  constitute  only  about  4  per  cent,  of  the  total 
number  of  mills,  now  produce  about  60  per  cent,  of  the 
country's  lumber.  The  proportion  both  of  the  largest 
sized  mills  and  of  their  cut  to  the  total  has  tended  to  in- 
crease in  the  last  ten  years. 

In  1870,  when  the  United  States  began  its  policy  of  alien- 
ation of  its  timberlands,  the  Government  owned  approxi- 
mately three-fourths  of  the  country's  timber.  Of  the 
2,215  billion  feet  of  standing  timber  now  in  the  United 
States  the  United  States  Forest  Service  estimates  that 
about  30  per  cent.,  or  659  billion  feet,  is  publicly 


io8          SOME  GREAT  COMMODITIES 

owned,  while  70  per  cent.,  or  1,556  billion  board  feet, 
is  owned  privately.  Of  the  659  billion  feet  publicly  owned 
the  Federal  Government  has  600  billion  of  which  about 
498  billion  feet  or  22  per  cent,  of  the  country's  timberlands 
is  included  in  the  national  forests.  State  and  municipal 
lands  contain  59  billion  board  feet,  or  3  per  cent.  About 
four-fifths  of  the  timber  in  the  national  forests  is  con- 
tained in  the  five  states  of  the  Pacific  Northwest,  while 
only  a  very  insignificant  part  of  it  lies  east  of  the  Rocky 
Mountains. 

The  opinion  has  been  expressed  in  the  lumber  trade  that 
it  may  be  desirable  ultimately  to  double  the  present  acre- 
age of  the  public  forests.  This  could  be  done  by  the  ex- 
tension of  the  national  forests  by  purchase,  by  exchange 
of  stumpage  for  other  land  and  by  placing  under  perma- 
nent administration  the  forest  lands  now  in  the  unreserved 
public  domain.  State  forests  might  also  be  enlarged. 
Some  depleted  and  waste  cut-over  and  burned  lands 
should  be  rehabilitated.  It  is  not  advantageous  always 
to  reforest  cut-over  lands,  since  they  may  offer  better  re- 
turns for  agriculture  or  other  industry  established  on  them. 
However,  where  through  public  and  private  cooperation 
and  protection  the  replanting  of  cut-over  timberlands 
promises  a  fair  return,  reforestation  seems  the  logical 
course.  A  public  survey  of  forest  resources  and  a  classi- 
fication of  cut-over  lands  would  facilitate  a  determination 
of  whether  they  are  more  suitable  for  agriculture  or  for 
permanent  timber  growth. 

Tax  accumulations,  the  cost  of  protection  against  fires, 
insects  and  disease  and  the  fact  that  timber  takes  genera- 
tions to  mature,  all  tend  to  discourage  reforestation  by 
private  owners  who  too  often  take  a  short-sighted  view  of 


LUMBER  109 

their  functions.  The  responsibility  for  reforestation, 
however,  rests  upon  private  owners  as  well  as  upon 
the  public  at  large,  and  the  practice  of  forestry  should 
be  made  effective  both  for  public  forests  and  for  privately 
owned  timber. 


PETROLEUM  AND  PETROLEUM  PRODUCTS 

TTN  THE  sixty-odd  years  since  American  wells  began 
production  petroleum  has  found  ever  increasing  world- 
•*•  wide  use  until  it  has  become  an  essential  of  modern 
civilization.  Crude  or  semi-refined  petroleum  is  used 
extensively  as  a  fuel  for  locomotives  and  steamships  and 
in  a  more  limited  way  as  a  lubricant.  Its  principal  use, 
however,  is  in  the  form  of  numerous  refined  products, 
among  which  gasoline,  kerosene,  gas  and  fuel  oil,  lubricants, 
paraffin,  coke,  asphalt  and  petrolatum  serve  to  illustrate  the 
variety  and  multiplicity  of  its  applications  to  modern  needs. 

PETROLEUM  RESOURCES  OF  THE  WORLD 

The  United  States  has  long  been  preeminent  in  the  petro- 
leum industry,  but  it  occupies  the  unenviable  position  of 
exhausting  its  resources  much  more  rapidly  than  the  rest 
of  the  world.  Starting  with  a  supply  estimated  at  14 
billion  barrels  it  has  used  up  some  5  billion,  leaving  only 
about  9  billion  barrels,  or  64  per  cent,  of  its  original  re- 
sources, still  available.  On  the  other  hand,  the  world 
outside  the  United  States  is  thought  to  have  56  billion 
barrels,  or  over  90  per  cent,  of  its  original  supply  of  approx- 
imately 60  billion  barrels.  As  the  United  States  regularly 
produces  three-fifths  or  more  of  the  world's  annual  output, 
each  year  finds  this  country  in  a  relatively  worse  position. 

While  the  using  up  of  natural  resources  is  deplorable, 
still  the  material  gains  resulting  from  their  exploitation 

no 


PETROLEUM  AND  PRODUCTS        1 1 1 

should  not  be  overlooked,  for  in  a  large  measure  the  grad- 
ual exhaustion  of  American  petroleum  has  been  offset  by 
the  advances  of  American  industries  thus  made  possible. 

Table  A,  which  was  prepared  from  figures  compiled  by 
the  United  States  Geological  Survey,  shows  an  estimate 
of  the  petroleum  deposits  remaining  in  the  different  regions 
of  the  world.  Any  such  table  is  liable  to  a  wide  margin 
of  error,  but  it  is  believed  that  the  figures  understate  rather 
than  exaggerate  the  amounts. 

TABLE  A— PETROLEUM  RESOURCES  OF  THE  WORLD 

Estimated 
deposits 

Country  or  region  (in  thousands 

of  barrels  of  42 
gallons) 

United  States 9,000,000 

Southeastern  Russia,  southwestern  Siberia  and  the  Caucasus  5,830,000 

Persia  and  Mesopotamia 5,820,000 

Northern  South  America,  including  Peru 5,730,000 

Mexico 4,525,000 

Southern  South  America,  including  Bolivia 3,550,000 

East  Indies 3,015,000 

China 1,375,000 

Japan  and  Formosa 1,235,000 

Rumania,  Galicia  and  western  Europe 1,135,000 

Canada 995,000 

India 995,000 

Northern  Russia  and  Saghalien 925,000 

Algeria  and  Egypt 925,000 

Total  known  supply 45,055,000 

Additional  deposits  probable 20,000.000 

Grand  total 65,055,000 

The  deposits  of  the  United  States  are  estimated  as  mak- 
ing up  about  one-fifth  of  the  world's  known  supply  and 
about  one-seventh  of  the  probable  total  stock.  They  are 
2,245,000,000  barrels  greater  than  the  total  for  Russia, 
which  has  the  second  largest  supply.  In  addition  to  these 
countries  the  petroleum  resources  of  Persia  and  Meso- 
potamia and  of  northern  South  America,  including  Peru, 


ii2          SOME  GREAT  COMMODITIES 

are  estimated  to  be  greater  than  those  of  Mexico  although 
that  country  is  now  second  only  to  the  United  States  in 
annual  production. 

If  an  annual  rate  of  450,00x3,000  barrels,  a  figure  nearly 
reached  in  1920  and  exceeded  by  20,000,000  barrels  in 
1921,  were  to  be  maintained  in  the  United  States  until  the 
wells  were  exhausted,  the  known  supply  would  run  out  in 
about  20  years.  These  oil  fields,  however,  are  likely  to 
show  long  periods  of  declining  productivity  before  they 
are  completely  exhausted.  It  is  impossible  to  estimate 
when  the  United  States  will  have  used  up  its  petroleum 
resources,  but  a  period  of  constantly  decreasing  produc- 
tion with  occasional  increases  as  new  wells  are  opened  up 
and  new  methods  of  recovery  are  instituted  may  be  ex- 
pected to  begin  within  the  next  few  years. 

To  meet  the  emergency  of  a  declining  output  of  petro- 
leum the  United  States  has  in  reserve  huge  deposits  of 
oil  shale  from  which  great  quantities  of  petroleum  products 
may  be  obtained  when  it  becomes  economical  to  produce 
them.  Enormous  amounts  of  oil  shale  rich  in  oil  are 
found  in  northwestern  Colorado,  northeastern  Utah,  south- 
western Wyoming  and  northern  Nevada.  Deposits  of 
more  limited  extent  and  generally  less  rich  are  located  in 
Pennsylvania,  Indiana,  Kentucky,  Texas,  Wisconsin, 
Michigan,  West  Virginia  and  elsewhere.  Though  the  oil 
shale  industry  is  of  long  standing  in  other  parts  of  the 
world,  notably  Scotland,  France  and  Australia,  it  has  not 
yet  passed  the  experimental  stage  in  the  United  States. 

PETROLEUM  PRODUCTION  OF  THE  WORLD 

The  petroleum  output  of  the  leading  producing  countries 
in  the  last  five  years  is  shown  in  Table  B.  Production  in 


PETROLEUM  AND  PRODUCTS 

Russia,  Rumania,  Galicia  and  Germany  was  greatly  cur- 
tailed as  a  result  of  the  war  and  has  not  yet  recovered. 
Mexico,  on  the  other  hand,  showed  a  very  marked  gain 
during  recent  years,  producing  in  1921  about  26  per  cent, 
of  the  world's  total  output.  The  figures  for  1921,  except 
for  the  United  States  and  Mexico,  are  estimates  by  the 
American  Petroleum  Institute,  while  those  for  1917-20  are 
as  reported  by  the  United  States  Geological  Survey.  Data 
for  a  number  of  the  countries,  especially  for  the  more  re- 
cent years,  are  subject  to  a  considerable  margin  of  error. 
The  table  should  be  regarded,  therefore,  as  showing  the  best 
approximations  available  rather  than  accurate  statements 
of  production. 


Country 


TABLE  B — WORLD'S  PETROLEUM  PRODUCTION 

1917  1918  1919  1920 

(in  thousands  of  barrels  of  42  gallons) 


1921 


United  States  

.  .     335,316 

355,928 

377,719 

443,402 

469,639 

Russia  

.  .       69,960 

40,456 

25,498 

25,430 

28,500 

Mexico  

.  .       55,293 

63,828 

87,073 

163,540 

193,398 

Dutch  East  Indies1  

.  .       12,929 

13,285 

15,428 

18,545 

19,000 

India  

8,079 

8,188 

8,735 

7,500 

6,864 

Persia   

6,856 

8,271 

6,412 

12,353 

14,600 

Galicia  

5,965 

5,592 

6,054 

5,606 

3,665 

Rumania  

3,721 

8,730 

6,614 

7,435 

8,347 

Japan  and  Formosa.  .  . 

2,882 

2,449 

2,175 

2,140 

2,600 

Peru  

2,533 

2,536 

2,616 

2,817 

3,568 

Trinidad  

1,602 

2,082 

1,841 

2,083 

2,354 

Argentina  

1,145 

1,321 

1,183 

1,666 

1,747 

Egypt  

1,009 

2,080 

1,501 

1,042 

1,181 

Germany2  

645 

711 

234 

212 

200 

Canada  

214 

305 

241 

197 

190 

Venezuela  

128 

190 

425 

457 

1,078 

Other  countries3  

59 

36 

1,136 

429 

433 

Total  

508,336 

515,988 

544,885 

694,854 

757,364 

Including  British  Borneo,  which  in  1921  produced  1,000,000  barrels. 

2Production  of  Alsace  included  with  that  of  Germany  until  1919.  Alsatian  production 
estimated  at  344,000  barrels  in  1919,  at  389,000  barrels  in  1920,  and  at  392,000  barrels  in 
1921. 

'Including  chiefly  production  of  Italy,  Algeria,  Cuba,  England,  and,  in  1919,  1920  and 
1921.  Alsace. 


114          SOME  GREAT  COMMODITIES 

The  advance  in  the  Mexican  output  has  been  very  rapid 
ever  since  production  on  a  commercial  scale  was  com- 
menced in  1901.  In  that  year  10,345  barrels  were  pro- 
duced. By  1907  the  output  had  grown  to  1,005,000 
barrels,  and  by  1913  to  25,696,291.  Total  production 
from  1901  to  1921  was  730,000,000  barrels,  or  more 
than  has  been  obtained  in  any  of  the  other  producing 
countries,  excepting  the  United  States  and  Russia,  from 
the  beginning  of  their  production  to  date.  Of  the  coun- 
tries shown  in  the  table  only  Argentina,  Trinidad,  Egypt, 
Persia  and  Venezuela  have  had  a  more  recent  develop- 
ment of  their  oil  resources  than  has  Mexico. 

Rapid  exploitation  of  Mexican  petroleum  resources  has 
been  due  to  the  fact  that  the  wells  are  all  gushers.  Pump- 
ing, which  is  required  in  most  other  fields,  is  not  necessary 
there  as  the  oil  is  forced  out  under  a  great  hydrostatic 
pressure.  As  the  pools  become  exhausted  salt  water  fol- 
lows the  oil  to  the  surface,  but  it  should  be  understood 
that  the  appearance  of  salt  water  in  one  pool  has  no  sig- 
nificance as  to  the  degree  of  exhaustion  of  separate  and  un- 
related pools.  Many  of  the  wells  in  the  Amatlan  pool, 
located  in  the  Tampico-Tuxpam  district,  have  recently 
been  showing  an  increasing  tendency  to  flow  salt  water. 
The  approaching  exhaustion  of  this  pool  may  probably 
be  traced  to  the  competitive  conditions  under  which  it 
was  developed.  In  this  region  there  are  many  small  hold- 
ings by  competing  companies,  so  that  each  company  has 
felt  it  necessary  to  secure  all  the  oil  possible  lest  other 
wells  draining  the  same  pool  get  the  supply. 

Most  of  the  Mexican  output  is  exported  to  the  United 
States  where  it  finds  a  market  chiefly  as  fuel  oil  or  asphalt, 
since  only  about  9  per  cent,  of  gasoline  and  4  per  cent,  of 


PETROLEUM  AND  PRODUCTS          115 

kerosene  are  obtainable  from  the  average  grade.  The 
bulk  of  this  fuel  oil  is  sold  on  the  Atlantic  coast  of  the 
United  States  where  it  is  better  able  than  Mid-Continent 
oil  to  compete  with  coal,  since  it  enjoys  an  advantageous 
freight  rate. 

PETROLEUM  PRODUCTION  IN  THE  UNITED  STATES 

Although  petroleum  has  been  known  and  used  since 
earliest  times  there  was  practically  no  development  of  the 
industry  until  oil  wells  came  to  be  actively  exploited  in 
the  United  States.  In  1859  Edwin  L.  Drake  struck  oil  in 
a  well  drilled  near  Titusville  in  northwestern  Pennsyl- 
vania. This  well,  which  furnished  40  barrels  at  first  and 
later  only  15  barrels  of  petroleum  a  day,  was  the  real  be- 
ginning of  the  vast  modern  industry. 

The  Appalachian  field  thus  opened  up  furnished  all  the 
oil  produced  in  the  United  States  from  1859  to  1875,  sup- 
plied over  nine-tenths  of  the  total  until  1887,  and  over 
one-half  until  1901.  A  maximum  production  of  36,295,000 
barrels  was  reached  in  1900  but  by  1921  the  output 
was  reduced  to  30,574,000  barrels,  having  been  as  low  as 
22,860,000  barrels  in  1915. 

Table  C,  which  shows  the  production  of  petroleum  by 
states  and  fields  in  1921,  indicates  the  locations  of  the 
different  fields  as  well  as  the  relative  importance  of  the 
states  and  fields  in  the  quantity  of  oil  produced  in  that 
year. 

To  a  great  extent  the  separation  of  producing  areas  into 
fields  is  determined  by  the  fundamental  differences  in  the 
types  of  oil  produced  rather  than  by  geographic  boun- 
daries. The  oils  of  the  Appalachian  field  are  mainly  of 
paraffin  base,  free  from  asphalt  and  objectionable  sulphur, 


n6         SOME  GREAT  COMMODITIES 

TABLE  C— PRODUCTION  OF  PETROLEUM  IN  THE  UNITED  STATES  IN  1921 
BY  FIELDS  AND  STATES 

«•-,,,  o~»  c*o*  Production 

Field  and  State  (in  thousands  of  barrels 

of  42  gallons) 

Mid-Continent — 

Oklahoma 113,978 

Central  and  northern  Texas 70,892 

Kansas 36,232 

Northern  Louisiana 24,793 

Arkansas 10.190 

Total 256,085 

California. 114,709 

Appalachian — 

Kentucky 8,951 

West  Virginia 8,003 

Pennsylvania 7,434 

Central  and  eastern  Ohio 5,194 

New  York 980 

Tennessee 

Total. .  30,574 
Gulf- 
Coastal  Texas 32,430 

Coastal  Louisiana 1,730 

Total 34,160 

Rocky  Mountain — 

Wyoming 19,222 

Montana 1,435 

Colorado 108 

Total.  .  20,765 

Illinois 10,044 

Lima-Indiana — 

Northwestern  Ohio 2,139 

Indiana 1,163 

Total 3,302 

Grand  total 469,639 

and  yielding  by  ordinary  refining  methods  high  percent- 
ages of  gasoline,  kerosene  and  lubricants. 

In  1876  the  California  field  began  production  on  a  com- 
mercial scale  with  an  output  of  12,000  barrels.  Though 
still  showing  increased  production  from  year  to  year,  this 
field  reached  its  greatest  relative  importance  in  1913,  when 


PETROLEUM  AND  PRODUCTS          117 

with  97,789,000  barrels  it  supplied  nearly  two-fifths  of  the 
total  for  the  country.  The  California  oils  as  a  rule  have 
much  asphalt  and  little  or  no  paraffin.  They  have  vary- 
ing proportions  of  sulphur  and  furnish  chiefly  fuel  oils, 
lamp  oils,  lubricants  and  asphalt.  Low  percentages  of 
gasoline  are  derived  from  certain  of  the  lighter  oils,  espe- 
cially those  in  the  southern  part  of  the  state. 

The  Lima-Indiana  field  was  the  next  to  be  developed. 
Starting  with  an  output  of  1,138,000  barrels  in  1886  it 
reached  its  greatest  production,  25,256,000  barrels,  or 
slightly  over  two-fifths  of  the  total  for  the  United  States, 
in  1896.  These  oils  contain  some  asphalt  although  they 
are  principally  of  paraffin  base.  They  are  contaminated 
with  sulphur  compounds  which  require  special  treatment 
for  elimination. 

Commercial  production  in  the  Rocky  Mountain  field 
began  with  76,000  barrels  in  1887.  Its  relative  as  well  as 
absolute  importance  is  still  increasing  although  its  produc- 
tion was  less  than  5  per  cent,  of  the  total  in  1921.  The 
product  is  mainly  of  paraffin  base  suitable  for  refining  by 
ordinary  methods,  but  heavy  asphaltic  oils  of  fuel-oil  grade 
are  also  obtained  in  certain  of  the  Wyoming  fields. 

One  thousand  barrels  of  oil  were  produced  in  the  Illinois 
field  in  1889,  but  less  was  obtained  in  the  subsequent  years 
until  1905  when  181,000  barrels  were  produced.  The 
output  reached  its  highest  point  in  1908  with  33,686,000 
barrels.  These  oils  contain  varying  proportions  of  both 
asphalt  and  paraffin,  and  differ  as  to  specific  gravity  and 
distillation  products.  Sulphur  is  generally  present  but 
seldom  in  such  form  as  to  make  necessary  special  treat- 
ment for  its  removal. 

The  Mid-Continent  field  started  production  with  500 


n8          SOME  GREAT  COMMODITIES 

barrels  in  1889.  Nearly  every  year  since  then  has  shown 
a  marked  increase  and  apparently  the  maximum  has  not 
yet  been  reached.  It  has  been  the  chief  producing  field 
since  1915,  taking  rank  over  California  in  that  year  largely 
by  reason  of  the  development  of  the  Cushing  pool  in 
Oklahoma.  Petroleum  from  this  field  has  widely  varying 
characteristics.  Sulphur  is  present  in  the  lower  grade  oils, 
in  certain  of  which,  Healdton  for  example,  it  exists  in  a 
form  necessitating  special  treatment  for  its  elimination. 

Development  of  the  Gulf  field  likewise  started  in  1889, 
when  48  barrels  were  produced.  The  Gulf  production  was 
negligible  until  1901  when  3,593,000  barrels  were  obtained. 
The  output  of  36,526,000  barrels  in  1905  has  not  since  been 
equaled.  Gulf  oils  have  high  percentages  of  asphalt  and 
low  percentages  of  the  lighter  distillation  products.  Con- 
siderable sulphur  is  present,  but  much  of  it  is  in  a  form 
easily  removed  before  refining  or  using  the  oil  for  fuel. 

The  annual  production  of  each  of  the  fields  since  1918  is 
shown  in  Table  D.  The  fields  are  named  in  the  descend- 
ing order  of  the  quality  of  their  product. 

It  is  significant  of  the  peculiar  conditions  prevailing  in 
the  production  of  petroleum  that  despite  general  busi- 

TABLE  D — PETROLEUM  PRODUCTION  IN  THE  UNITED  STATES  BY  FIELDS 

—  . .  1918  1919  1920  1921 

(in  thousands  of  barrels  of  42  gallons) 

Appalachian.  .  25,401  29,232  30,511  30,574 

Illinois..                    13,366  12,436  10,772  10,044 

Lima-Indiana..                           ...  3,221  3,444  3,059  3,302 

Mid-Continent 179,383  196,891  249,074  256,085 

Rocky  Mountain 12,809  13,584  17,517  20,765 

Gulf. 24,208  20,568  26,801  34,160 

California 97,532  101,564  105,668  114,709 

Total 1355,928    377,719    443,402    469,639 

^Includes  8,000  barrels  produced  in  Alaska  and  Michigan. 


PETROLEUM  AND  PRODUCTS          119 

ness  depression  accompanied  by  a  fall  in  petroleum  prices 
the  output  in  1921  showed  an  increase  of  6  per  cent,  over 
1920.  The  gain  was  shared  by  all  but  the  Illinois  field,  in 
which  production  has  regularly  been  falling  off  in  recent 
years.  When  oil  has  been  struck  in  a  well  production  is 
maintained  with  little  regard  for  the  prices  obtained  for 
the  product.  Especially  is  this  true  where  rival  interests 
own  wells  draining  a  common  pool.  Not  only  must  a 
producer  continue  to  draw  oil  from  his  wells  in  order  to 
get  a  maximum  supply  ahead  of  competitors,  but  this  is 
necessary  also  lest  the  underground  flow  be  diverted  from 
his  wells,  should  he  shut  down,  with  resultant  loss  in  daily 
output  when  he  resumes  operations.  Moreover,  similar 
considerations  compel  producers  on  adjacent  oil  lands  to 
vie  with  each  other  in  drilling  offsets. 

Depression  in  the  petroleum  industry  does,  however, 
limit  to  some  extent  the  drilling  of  wells  in  known  fields, 
and  to  an  even  greater  degree  the  exploration  of  new  ter- 
ritory. Since  production  is  sustained  only  by  drilling 
an  increasing  number  of  wells  in  any  given  field,  and  since 
new  territory  must  be  opened  up  to  compensate  for  exhaus- 
tion of  old  fields,  a  decline  in  drilling  is  after  a  time  fol- 
lowed by  a  falling  off  in  production.  Conversely,  a  period 
of  prosperity  brings  increased  production  after  a  delay 
of  months. 

Thus,  while  the  increasing  production  in  the  first  part 
of  1921  was  probably  a  result  of  the  prosperity  in  1919 
and  the  first  part  of  1920,  there  may  be  a  period  of 
declining  output  ahead  which  will  reflect  the  depression 
of  the  first  part  of  1921.  In  this  connection  it  should  be 
recognized,  however,  that  the  drilling  of  a  few  very  pro- 
ductive wells  is  equivalent  to  the  bringing  in  of  many  wells 


I2O 


SOME  GREAT  COMMODITIES 


TABLE  E— SUPPLY  AND  DISTRIBUTION  OF  PETROLEUM  IN  THE  CONTINENTAL 

UNITED  STATES 


Item 

Production 

Net  imports  of  crude  oil1  . 

Total 

Supplied  to  refineries 

Added  to  pipe-line  stocks 
Added  to  other  stocks, 

lost,    or   consumed   in 

crude  state.  . 


1917  1918  1919  1920 

(in  thousands  of  barrels  of  42  gallons) 


1921 


335,316  355,928  377,719  443,402  469,639 

23,858  31,852  46.474  96,881  115,680 

359,174  387,780  424,193  540,283  585,319 

306,400  330,136  358,914  442,032  448,664 

216,355  224,315  6,140  5,823  54,454 


69,129   81,959   59,139   92,428   82,201 


1Total  imports  minus  exports  to  Alaska,  Hawaii,  the  Philippine  Islands,  Porto  Rico  and 

foreign  countries. 

'Withdrawn. 

of  only  moderate  capacity.  The  number  of  new  oil  wells 
completed  each  month  fell  off  from  about  1,830  in  Jan- 
uary, 1921,  to  about  752  in  October,  the  latter  figure 
being  the  smallest  in  five  years.  December  returns,  how- 
ever, showed  an  increase  to  1,110  wells. 


PETROLEUM  TRADE  OF  THE  UNITED  STATES 

That  the  importation  of  the  low-grade  Mexican  oils,  as 
well  as  the  takings  of  refineries,  was  sustained  during  the 
depression  is  shown  by  Table  E,  which  likewise  shows 
that  the  additions  to  pipe-line  stocks  in  1921  were  enor- 
mous. 

Practically  all  the  crude  oil  brought  into  the  United 
States  comes  from  Mexico.  In  view  of  the  ever-increasing 
importance  of  the  quantity  of  this  oil  in  the  total  supply 
the  only  reason  that  the  imports  did  not  exert  a  more 
pronounced  effect  upon  the  domestic  markets  is  that  its 
quality  is  inferior.  Exports  of  petroleum  in  crude  con- 
dition are  comparatively  insignificant,  going  for  the  most 
part  to  Canada.  Shipments  of  crude  petroleum  to  Alaska, 


PETROLEUM  AND  PRODUCTS          121 

Hawaii,  the  Philippine  Islands  and  Porto  Rico,  though 
small,  have  been  excluded  from  Table  E  in  order  to  con- 
fine the  consideration  strictly  to  the  continental  United 
States. 

Notwithstanding  large  imports  from  Mexico  it  was  only 
in  1920  and  1921  that  the  United  States  retained  more 
petroleum  than  it  produced,  when  the  exportation  of  the 
refined  products  is  taken  into  account.  In  other  words, 
except  for  the  last  two  years  when  imports  of  crude  oil 
were  especially  heavy,  the  net  position  of  the  United  States 
with  regard  to  petroleum  and  petroleum  products  has  been 
that  of  an  exporter. 

By  far  the  larger  part  of  the  crude  petroleum  stored 
above  ground  in  the  United  States  is  held  in  large  storage 
farms  by  the  pipe-line  and  marketing  companies.  Oil 
thus  held  is  described  as  pipe-line  stocks.  These  stocks 
have  a  stabilizing  influence  upon  the  petroleum  supply. 
When  the  demand  exceeds  production,  as  in  1917  and  1918, 
the  shortage  is  met  by  a  withdrawal  of  stocks  from  storage. 
In  periods  of  overproduction,  on  the  other  hand,  additions 
are  made  to  stocks.  Crude  oil  run  to  storage  in  1919  and 
1920  amounted  to  little  over  I  per  cent,  of  the  current 
supply,  but  in  1921  the  additions  to  stocks  consisted  of 
54,454,000  barrels  or  9  per  cent,  of  the  supply.  The  total 
gross  pipe-line  stocks  at  the  end  of  December,  1921, 
amounted  to  182,482,000  barrels.  This  quantity  included 
12,132,000  barrels  of  bottom  settlings  and  water  in  the 
territory  east  of  California  that  should  not  be  counted 
as  petroleum,  but  which  have  been  included  because  the 
figures  for  the  California  holdings,  33,289,000  barrels, 
include  an  indeterminate  amount  of  bottom  settlings  and 
water,  some  residuum  and  unfinished  refinery  products 


122          SOME  GREAT  COMMODITIES 

that  have  been  turned  back  to  pipe  lines,  and  also  pro- 
ducers' stocks. 

Other  stocks  are  those  of  Mexican  oil  held  in  the  United 
States  by  importers.  These  aggregated  13,540,000  bar- 
rels on  December  31,  1921,  as  compared  with  7,442,000 
on  December  31,  1920.  Statistics  for  these  stocks  are  not 
available  for  previous  years.  The  Mexican  stocks  include 
both  crude  oil  and  oil  that  has  been  "topped,'*  that  is, 
oil  that  has  been  subjected  to  a  preliminary  refinery  proc- 
ess by  which  the  lighter  products,  for  the  most  part  gaso- 
line, have  been  abstracted.  On  December  31,  1921,  there 
were  11,125,000  barrels  of  Mexican  crude  and  2,415,000 
barrels  of  topped  oil  in  the  hands  of  importers. 

The  refineries  regularly  have  a  considerable  store  of 
crude  petroleum  but  the  supply  varies  somewhat  from 
time  to  time.  On  December  31,  1916,  the  refineries  held 
20,370,000  barrels,  but  at  the  close  of  1917  a  low  record 
of  11,638,000  barrels  was  established.  At  the  end  of  1920 
the  refinery  stocks  of  crude  oil  consisted  of  21,261,000 
barrels.  By  the  end  of  1921  this  stock  had  grown  to 
26,562,000  barrels. 

Most  of  the  crude  oil  produced  in  the  United  States  is 
bought  by  large  marketing  companies  or  purchasing  de- 
partments of  the  big  refineries  at  prices  announced  or 
"posted"  by  the  purchasers.  Some  of  the  crude  pe- 
troleum is  bought  direct  by  small  refiners  who  often  pay 
a  premium  on  the  posted  price  because  of  the  limited 
quantities  they  are  prepared  to  take.  At  times  of  over- 
production in  a  given  field,  however,  the  small  refiners 
may  occasionally  be  able  to  buy  at  less  than  the  posted 
price. 

The  posted  prices  of  two  of  the  leading  grades  of  petro- 


PETROLEUM  AND  PRODUCTS          123 

leum  are  shown  for  each  month  from  1913  to  1921  in 
Table  F. 

TABLE  F— WHOLESALE  PRICES  OF  CRUDE  PETROLEUM  AT  WELLS  FOR 

AVAILABLE  DATE  NEAREST  THE  FIFTEENTH  OF  EACH  MONTH,  1913-21, 

IN  DOLLARS  PER  BARREL  OF  42  GALLONS 

Month  1913  1914  1915  1916  1917  1918  1919  1920  1921 

Pennsylvania 


January  

....     2.05  2.50  1.50  2.25  3.05  3.75  4.00  5.00  5.75 

February  

....     2.50  2.50  1.50  2.35  3.05  4.00  4.00  5.50  3.75 

March  

....     2.50  2.50  1.45  2.50  3.05  4.00  4.00  6.10  3.00 

April  

....     2.50  2.50  1.35  2.60  3.05  4.00  4.00  6.10  3.00 

May  

....     2.50  1.90  1.35  2.60  3.10  4.00  4.00  6.10  3.50 

June  

....     2.50  1.80  1.35  2.60  3.10  4.00  4.00  6.10  2.75 

July  

....     2.50  1.70  1.35  2.60  3.10  4.00  4.00  6.10  2.25 

August  

....     2.50  1.55  1.45  2.30  3.25  4.00  4.00  6.10  2.25 

September.  

....     2.50  1.45  1.65  2.30  3.50  4.00  4.25  6.10  2.25 

October  

....     2.50  1.45  1.75  2.50  3.50  4.00  4.25  6.10  3.25 

November  

....     2.50  1.45  1.90  2.60  3.50  4.00  4.50  6.10  4.00 

December  

....     2.50  1.45  2.10  2.75  3.75  4.00  4.50  6.10  4.00 

Kansas-Oklahoma 

January.  .                        .83  1.03  .55  1.20  1.70  2.00  2.25  3.00  3.50 

February 88  1.05  .40  1.30  1.70  2.00  2.25  3.00  1.75 

March 88  1.05  .40  1.55  1.70  2.00  2.25  3.50  1.75 

April 88  .85  .401.551.702.252.253.501.75 

May 88  .75  .401.551.702.252.253.501.50 

June 88  .75  .401.551.702.252.253.501.25 

July 93  .75  .  40  1.55  1.70  2.25  2.25  3.50  1.00 

August 98  .75  .60     .951.902.252.253.501.00 

September 1.03  .65  .80     .902.002.252.253.501.00 

October 1.03  .55  .80     .902.002.252.253.501.50 

November 1.03  .551.00     .902.002.252.253.502.00 

December 1.03  .55  1.20  1.10  2.00  2.25  2.50  3.50  2.00 

The  depression  of  prices  in  the  second  half  of  1914  and 
through  1915,  shown  in  the  table,  was  a  reflection  of  the 
great  overproduction  brought  about  by  the  development 
of  the  Gushing  pool.  With  the  abrupt  decline  in  the  out- 
put of  the  Gushing  pool  toward  the  end  of  1915  and  the 
increased  demand  which  followed,  the  price  rose  until  in 
1920  it  reached  $6.10  a  barrel  for  Pennsylvania  crude  and 


i24          SOME  GREAT  COMMODITIES 

$3.50  for  Kansas-Oklahoma  crude.  The  posted  prices 
slumped  in  1921  but  in  the  latter  part  of  October  and  the 
first  part  of  November  were  advanced  to  $4.00  for  Penn- 
sylvania and  $2.00  for  Kansas-Oklahoma  crude  in  spite 
of  ever-accumulating  stocks. 

Oil  is  carried  from  the  producers'  field  tanks  to  the  re- 
fineries or  to  storage  tanks  by  pipe  lines,  a  relatively  small 
amount  being  transported  in  tank  cars.  As  the  refineries 
are  located  in  places  convenient  to  the  markets  for  their 
products  the  pipe  lines  are  often  hundreds  of  miles  in 
length.  In  fact,  the  pipe-line  system,  including  trunk  lines 
and  branches,  forms  a  vast  invisible  network  extending 
thousands  of  miles.  The  steel  pipes  are  laid  near  the  sur- 
face of  the  ground  and  the  main  lines  are  generally  eight 
inches  in  diameter.  A  pumping  station  which  maintains 
the  flow  of  the  oil  is  located  on  an  average  of  every  40 
miles,  although  the  distances  vary  greatly,  depending 
on  the  quantity  and  grade  of  the  oil,  topography  of  the 
country,  etc. 

Beginning  with  four  miles  of  iron  pipe  laid  down  in 
western  Pennsylvania  at  the  close  of  the  Civil  War,  these 
lines  have  gradually  been  extended  to  reach  pool  after 
pool  and  field  after  field  as  they  were  opened  up.  No 
lines  extend  eastward  from  the  California  or  Rocky  Moun- 
tain fields  but  the  Mid-Continent,  Illinois,  Lima-Indiana 
and  Appalachian  fields  all  send  their  oil  to  the  Atlantic 
seaboard  by  this  vast  transportation  system.  Lines  also 
run  from  the  Mid-Continent  and  Gulf  fields  to  the  Gulf 
ports  whence  shipments  are  made  by  tank  steamers.  The 
pipe  lines  are  common  carriers  although  the  bulk  of  their 
business  consists  in  carrying  oil  for  the  particular  refining 
companies  that  own  or  control  them. 


PETROLEUM  AND  PRODUCTS          125 

The  importance  of  refining  to  the  petroleum  industry 
is  brought  out  in  Table  E,  which  shows  that  from  1917 
to  1920  somewhat  over  four-fifths  of  the  crude  oil  sup- 
ply in  the  United  States  was  taken  by  the  refineries. 
That  the  proportion  was  less  in  1921  was  due  to  the  fail- 
ure of  the  demand  for  petroleum  products  to  keep  pace 
with  the  supply  of  crude  oil. 

REFINED  PETROLEUM  PRODUCTS 

The  products  obtained  in  the  course  of  refining  depend 
upon  the  quality  of  crude  oil  and  to  some  extent  upon  the 
completeness  of  the  equipment  of  the  refinery.  From 
the  better  grades  of  oil  four  major  "fractions"  are  dis- 
tilled; namely,  gasoline,  which  includes  all  the  lighter 
products,  kerosene,  gas  and  fuel  oil,  and  lubricating  oils. 
These  fractions  or  distillates  are  driven  off  successively 
by  heating  the  crude  oil  to  different  degrees,  the  lighter 
products  passing  off  at  the  lower  temperatures.  Poorer 
grades  of  oil  may  be  treated  only  to  remove  gasoline, 
which  interferes  with  the  use  of  the  crude  as  fuel  as  well 
as  being  too  valuable  to  waste  in  that  way.  Other  grades 
are  separated  into  three  products:  gasoline,  kerosene  and 
fuel  oil. 

After  the  simple  distillation  the  fractions  are  often  sub- 
jected to  complicated  methods  of  purification  and  adap- 
tion to  particular  needs.  The  gasoline  fraction  may  be 
further  distilled  into  light,  intermediate  and  heavy  prod- 
ucts. These  are  purified  by  treatment  with  sulphuric 
acid  and  other  chemicals  and  finally  may  be  distilled  or 
filtered  through  fullers'  earth.  The  more  volatile  products 
include  petroleum  ether  and  gasoline  used  in  aviation; 
intermediate  naphtha  is  ordinary  commercial  gasoline 


126          SOME  GREAT  COMMODITIES 

chiefly  used  for  automobiles;  and  heavy  naphtha  com- 
prises benzine,  cleaners'  naphtha,  and  varnish  makers'  and 
painters'  naphtha. 

Kerosene  distillate  is  ordinarily  distilled  a  second  time 
principally  to  remove  all  traces  of  gasoline.  It  is 
further  treated  chemically  to  purify  it  for  its  use  as  a 
lamp  oil. 

Gas  and  fuel  oil  is  generally  marketed  without  further 
treatment,  the  gas  oil  being  used  in  conjunction  with  coal 
or  alone  for  the  manufacture  of  city  gas.  Fuel  oil  is 
widely  used  as  a  substitute  for  coal  in  steam  raising,  espe- 
cially on  locomotives,  in  industrial  plants  and  on  steam- 
ships. By  special  "cracking"  processes,  by  which  the 
gas  and  fuel  oil  is  heated  under  pressure,  considerable 
quantities  of  gasoline  are  often  obtained  from  this  fraction 
also. 

The  fourth  fraction  contains  lubricating  oils,  greases 
and  paraffin  wax.  The  paraffin  is  separated  from  the 
rest  of  this  distillate  by  chilling  it  so  that  the  wax  solidifies, 
and  can  be  removed  by  filtering.  Petrolatum,  also  known 
as  "vaseline,"  is  obtained  from  this  fraction. 

Petroleum  coke  and  asphalt  are  obtained  chiefly  from 
the  heavier  oils  coming  from  Mexico  and  California.  They 
form  the  residue  after  gasoline,  kerosene  and  fuel  oil  are 
removed. 

In  addition  to  these  leading  products  there  are  many 
special  products  of  petroleum  manufactured  by  particular 
methods  to  adapt  them  to  special  needs. 

Table  G  shows  the  percentages  of  the  principal  refined 
products  obtained  from  the  crude  petroleum  run  to  refin- 
ery stills  in  the  United  States  in  the  years  from  1918  to 
1921. 


PETROLEUM  AND  PRODUCTS         127 

TABLE  G — PERCENTAGE  OF  REFINED  PRODUCTS  OBTAINED  FROM  CRUDE 
PETROLEUM  RUN  TO  STILLS  IN  THE  UNITED  STATES 

Product  1918    1919    1920    1921 

Gasoline 26  26  27  28 

Kerosene 13  15  13  10 

Gas  and  fuel  9il 54  50  48  52 

Lubricating  oil 6  6  6  5 

Other  products,  losses,  etc 6^       5 

Total 100  100  100  100 

To  some  extent  changes  in  the  proportion  of  the  different 
products  obtained  probably  reflect  changes  in  the  average 
quality  of  the  crude  oil  refined,  but  they  are  governed 
chiefly  by  changes  in  the  demand  for  the  different  products 
and  by  improvements  in  refining  methods.  Increased 
cracking  of  fuel  oil  and  use  of  natural  gas  gasoline  and  the 
classification  of  more  of  the  volatile  part  of  the  kerosene 
distillate  as  gasoline  account  for  the  gain  in  the  propor- 
tional yield  of  gasoline  in  1920  and  1921  which  was  in  re- 
sponse to  the  increased  demand  for  use  in  gasoline  motors. 

The  production  of  petroleum  products  together  with  the 
stocks  at  the  close  of  the  year  has  been  reported  for  each 
year  since  1916  by  the  United  States  Bureau  of  Mines. 
These  figures  when  taken  in  conjunction  with  those  for 
exports  indicate  the  domestic  consumption  of  each  prod- 
uct. Table  H  shows  these  statistics  from  1916  to  1921. 
The  quantity  of  crude  oil  run  to  stills  is  also  shown. 

Eighty-eight  per  cent,  of  the  gasoline  produced  at  the 
refineries  in  1921  was  consumed  in  the  United  States,  10 
per  cent,  was  exported  and  2  per  cent,  was  added  to  stocks. 
This  compared  with  87  per  cent,  consumed  in  1920,  13  per 
cent,  exported  and  less  than  i  per  cent,  added  to  stocks. 

Although  exports  were  relatively  more  important  in  the 
case  of  kerosene  than  in  respect  to  any  of  the  other  prod- 


128 


SOME  GREAT  COMMODITIES 


TABLE  H— REFINERY  STATISTICS  OF  PETROLEUM  PRODUCTS  IN  THE 
CONTINENTAL  UNITED  STATES 


Item 


1916 


1917        1918        1919        1920 
(in  millions  of  gallons) 


1921 


Crude  oil  run  to  stills 10,374  13,236  13,693  15,184  18,224  18,621 

Gasoline 

Production1 2,059    2,850    3,570    3,958  4,882  5,154 

Consumption1 2      2,346    3,129    3,435  4,251  4,516 

Net  exports 364       419       556       373  616  514 

Stocks  at  end  of  year1  ...  327       412       297       447  462  586 

Kerosene 

Production 1,455  1,727  1,825  2,342  2,320  1,945 

Consumption3 2  1,042  1,447  1,394  1,389  1,240 

Exports3 859  664  496  989  877  757 

Stocks  at  end  of  year ....  477  498  380  339  393  341 

Gas  and  fuel  oil 

Production 4,664  6,513  7,321  7,627  8,861  9,664 

Consumption3 2  5,280  5,718  6,290  6,705  7,080 

Exports34 1,195  1,376  1,522  1,282  2,033  2,090 

Stocks  at  end  of  year 721  578  659  714  837  1,331 

Lubricating  oil 

Production 625   754  841  847  1,047  878 

Consumption3 2     2  580  571  619  531 

Exports3 262   282  259  277  405  291 

Stocks  at  end  of  year 137  139  138  161  217 

*Not  including  gasoline  made  from  natural  gas  except  that  bought  by  refineries. 

*Not  available. 

'Figures  for  these  items  take  no  account  of  the  relatively  small  amounts  of  imports  re- 
tained for  consumption,  figures  for  which  were  not  reported  separately. 

'Includes  fuel  or  bunker  oil  laden  on  vessels  engaged  in  the  foreign  trade  and  in  the  case 
of  shipments  to  Alaska,  Hawaii  and  Porto  Rico,  shipments  of  residuum  from  refining. 

ucts,  about  three-fifths  of  the  production  were  consumed 
at  home  both  in  1920  and  1921.  In  both  years  nearly 
two-fifths  were  exported.  In  1920  stocks  increased  16 
per  cent.,  but  in  1921  there  was  a  slight  decline.  Produc- 
tion showed  decreases  in  each  of  the  years. 

Industrial  and  shipping  activity  failed  to  keep  pace  with 
the  production  of  gas  and  fuel  oil  and  lubricants  in  1920 
and  1921.  Thus,  while  there  was  an  absolute  gain  in 
the  use  of  both  products  in  1920  over  1919,  the  consump- 
tion of  gas  and  fuel  oil  fell  from  82  to  76  per  cent,  of  pro- 


PETROLEUM  AND  PRODUCTS 


129 


duction,  and  the  use  of  lubricating  oil  fell  from  67  to  59 
per  cent.  In  1921  consumption  of  gas  and  fuel  oil  still 
showed  a  gain,  but  only  73  per  cent,  of  the  increased  pro- 
duction was  used.  The  production  of  lubricants  declined 
at  about  the  same  rate  as  the  use.  Exports  of  gas  and 
fuel  oil  were  well  maintained  in  proportion  to  production, 
but  exports  of  lubricants  decreased  from  39  per  cent,  of 
production  in  1920  to  33  per  cent,  in  1921. 

The  accompanying  chart  shows  the  movement  of  the 
stocks  of  petroleum  products  by  months  from  July,  1917, 
to  December,  1921.  As  the  curves  are  drawn  on  a  semi- 
logarithmic  scale  their  trends  can  be  compared  directly 
without  regard  to  their  relative  positions  on  the  chart. 
The  seasonal  movement  in  gasoline  and  the  piling  up  of 
stocks  of  gas  and  fuel  oil  and  lubricating  oil  in  1921  are 
strikingly  shown. 

Production  figures  extending  back  to  1880  may  be  ob- 


*asr 


^ 


t 


V 


\ 


Stocks  of  Petroleum  Products  Held  at  Refineries  in  the  United  States  at  the 
Close  of  Each  Month  from  July,  1917,  to  December,  1921 


130          SOME  GREAT  COMMODITIES 

tained  from  the  records  of  the  United  States  Bureau  of 
the  Census.  Varying  terms  were  used  to  designate  the 
products  from  time  to  time,  but  in  Table  I  the  figures 
are  shown  divided  as  nearly  as  possible  into  the  classifica- 
tion adopted  by  the  United  States  Bureau  of  Mines. 
"Gasoline"  includes  naphtha  and  all  the  lighter  products 
of  distillation,  the  term  "kerosene"  is  used  in  place  of 
"illuminating  oils",  while  "lubricants"  includes  paraffin 
oil,  red  or  neutral  oils,  cylinder  oils,  other  lubricating  oils 
and  greases.  The  amount  of  crude  petroleum  consumed 
by  refineries  in  each  of  the  census  years  is  also  shown. 
Comparison  of  Table  I  with  Table  H  shows  a  disagree- 
ment between  the  two  government  bureaus  as  to  the  opera- 
tion of  refineries  in  1919.  They  are,  however,  essentially 
in  agreement  as  to  the  proportions  of  the  different  pro- 
ducts obtained  from  the  crude  oil. 

TABLE  I — PRODUCTION  OF  PETROLEUM  PRODUCTS  IN  THE  UNITED  STATES 

FROM  1880  TO  1919  AS  REPORTED  BY  THE  UNITED  STATES  BUREAU 

OF  THE  CENSUS 

Year  petroleum         Gasoline^          Kerosene         SMP!^?        Lubricants 

run  to  stills 

(in  millions  of  gallons) 

1880 732  75  2551  19 

1889 1,288  165  3848  99 

1899 2,184  281  1,259  305  199 

1904 2,813  291  1,357  360  325 

1909..  5,073  540  1,675  1,702  544 

1914...  8,033  1,460  1,935  3,734  532 

1919 15,341  4,206  2,305  7,768  850 

*Not  including  gasoline  made  from  natural  gas  except  that  bought  by  refineries. 
^Reported  as  "illuminating  oils"  but  probably  includes  some  gas  and  fuel  oil. 
'Reported  as  "burning  oils." 

KEROSENE 

The  first  half  century  of  the  growth  of  the  petroleum 
industry  was  characterized  by  a  demand  chiefly  for  illumi- 


PETROLEUM  AND  PRODUCTS          131 

nating  oil  or  kerosene.  This  product  quickly  displaced 
an  illuminating  oil  originally  obtained  by  the  distillation 
of  coal,  which  had  been  known  as  "coal  oil."  It  likewise 
took  the  place  of  whale  oil  and  other  fats  which  had  had 
wide  use  as  illuminants.  Even  to-day  it  is  the  chief  source 
of  artificial  light  in  districts  not  served  with  gas  or  electric- 
ity. As  new  uses  for  the  other  constituents  of  crude  oil 
developed,  however,  illuminating  oil  has  been  relatively 
of  decreasing  importance.  Much  of  the  oil  which  would 
now  be  classed  as  fuel  oil  was  evidently  used  for  illumi- 
nating in  the  years  preceding  1909.  Since  there  was  little 
demand  for  gasoline  in  these  years  as  much  as  possible 
was  left  with  the  kerosene,  while  considerable  quantities 
were  used  for  lighting  by  means  of  special  burners. 

In  recent  years  much  kerosene  has  been  made  to  serve 
as  a  motor  fuel.  With  the  growing  demand  for  gasoline 
increasing  fractions  of  potential  kerosene  have  been  drawn 
into  the  gasoline  supply.  Kerosene  engines  on  tractors 
and  motor  trucks  also  add  to  the  consumption  of  kerosene 
for  motive  power. 

An  export  trade  of  large  dimensions  was  an  early  de- 
velopment of  the  industry.  In  1880  exports  of  illuminat- 
ing oil  amounted  to  286,131,000  gallons.  In  this  and  the 
following  years  for  which  production  statistics  are  availa- 
ble, until  1917,  over  half  of  the  American  production  was 
exported.  Since  1917  the  importance  of  the  export  trade 
has  declined  somewhat.  The  quantity  of  exports  has 
likewise  been  decreasing  since  1919. 

Shipments  of  kerosene  are  made  to  practically  every 
country  in  the  world.  A  short  list  of  countries  will  suffice, 
however,  to  show  the  destination  of  the  bulk  of  the  exports. 
Table  J  shows  the  exports  of  kerosene  from  the  United 


132 


SOME  GREAT  COMMODITIES 


States  to  foreign  countries  in  the  years  from  1910  to  1914 
and  1919,  1920  and  1921,  by  the  principal  countries  of 
destination  in  each  of  these  periods.  Exports  to  Alaska, 
Hawaii  and  Porto  Rico  are  not  included.  Although  of 
considerable  importance  they  were  not  nearly  so  large  as 
the  shipments  to  the  countries  shown  separately  in  the 
table. 


TABLE  J — EXPORTS  OF  KEROSENE  FROM  THE  UNITED  STATES  TO  FOREIGN 

COUNTRIES 


Country 


United  Kingdom. 

Netherlands 

Germany 

China 

Japan 

Belgium 

France 

British  India.  . . . 
Other  countries . . 


U910-14 
(5-yr.  aver.) 

21919 

21920 

»1921 

(in  thousands  of  gallons) 

178,288 

166,630 

173,595 

123,526 

129,695 

45,530 

58,224 

61,162 

106,808 

15,193 

24,930 

14,759 

81,235 

164,366 

116,407 

108,048 

80,221 

31,700 

41,236 

18,638 

50,960 

17,594 

22,723 

21,225 

48,267 

82,400 

83,365 

57,181 

42,263 

56,608 

44,820 

38,474 

337,776 

399,134 

305,365 

305,946 

Total 1,055,513      979,155    870,665    748,959 

^Fiscal  years  ending  June  30. 
^Calendar  year. 


GASOLINE 

In  the  early  years  of  the  refinery  industry  gasoline 
formed  from  10  to  13  per  cent,  of  the  petroleum  refined. 
Between  1909  and  1914,  however,  the  proportion  increased 
from  ii  to  1 8  per  cent,  in  response  to  the  growing  demands 
for  its  use  in  internal-combustion  engines.  At  this  time 
gasoline  replaced  kerosene  as  the  most  valuable  product 
of  crude  petroleum  and  since  then  the  principal  concern 
of  the  refineries  has  been  to  obtain  as  large  a  fraction  of 
gasoline  as  possible.  In  1916  and  1917  gasoline  was  20 
and  22  per  cent,  respectively  of  the  crude  run  to  stills, 


PETROLEUM  AND  PRODUCTS          133 

while  in  1918  and  1919,  due  to  additional  production  of 
cracked  gasoline,  it  formed  26  per  cent,  of  the  crude.  In 
1920  it  was  27  per  cent,  and  in  1921,  28  per  cent,  of  the 
crude  oil  distilled. 

Not  all  the  gasoline  produced  in  refineries  is  obtained 
by  the  distillation  of  crude  petroleum,  however.  Casing- 
head  gasoline,  otherwise  known  as  natural  gas  gasoline  or 
natural  gasoline,  made  from  natural  gas,  is  bought  by 
refineries  to  add  to  the  volatility  of  the  gasoline  refined 
from  oil.  In  1918,  1919  and  1920  the  gasoline  thus  pur- 
chased constituted  3  per  cent,  of  the  gasoline  output  of 
the  refineries.  Allowing  for  the  casinghead  gasoline  in 
the  refinery  output,  gasoline  from  distillation  alone  made 
up  25  per  cent,  of  the  crude  oil  run  in  1918  and  1919  and 
26  per  cent,  in  1920.  Later  figures  are  not  yet  available. 

Gasoline  is  obtained  from  natural  gas  either  by  conden- 
sation or  by  absorption.  The  absorption  process  involves 
the  dissolving  of  the  gas  in  an  oil  heavier  than  gasoline 
and  then  recovering  by  distillation  the  gasoline  that  has 
been  absorbed.  The  casinghead  gasoline  industry  has 
had  a  remarkable  development  since  its  establishment  on 
a  commercial  scale  about  1909.  The  first  report  of 
the  quantity  produced  was  for  the  year  1911  when 
7,426,0x30  gallons  were  obtained.  By  1916,  five  years 
later,  the  production  was  103,493,000  gallons.  In  1920 
it  was  384,744,000  and  in  1921  473,659,000  gallons.  The 
total  net  output  of  gasoline  from  all  sources  in  the  United 
States  in  1914  was  1,500,204,000  gallons;  in  1918  it  was 
3,749,892,000  gallons;  in  1919  it  was  4,185,207,000  gallons; 
and  in  1920  it  was  5,134,868,000  gallons.  Figures  for 
other  years  are  not  available. 

The  principal  countries  to  which  the  United  States  ex- 


134 


SOME  GREAT  COMMODITIES 


ports  gasoline  are  shown  in  Table  K  together  with  the 
amount  shipped  to  each  from  1910  to  1914  and  in  1919, 1920 
and  1921.  The  increase  in  the  exports  in  recent  years  has 
been  very  marked,  especially  in  the  case  of  the  United 
Kingdom,  France,  Italy,  Australia  and  New  Zealand. 

TABLE  K— EXPORTS  OF  GASOLINE  FROM  THE  UNITED  STATES  TO  FOREIGN 

COUNTRIES 


Country 


21919 


»1920 


'1921 


(in  thousands  of  gallons) 


Canada 

United  Kingdom. 

France 

Argentina 

Germany 

Netherlands 

Italy 

Belgium 

Australia 

Brazil 

New  Zealand 

Sweden 

Spain 

Other  countries . . 


Total. 


»1910-14 
(5-yr.  aver. 

33,316 

24,866 

17,223 

12,025 

11,057 

9,385 

6,811 

6,105 

5,577 

4,567 

3,702 

1,296 

26 

11,376 


147,332       372,133    641,310    533,090 


31,245 

54,637 

43,886 

112,203 

146,954 

149,059 

74,810 

180,554 

95,362 

16,008 

18,464 

25,789 

4,230 

17,060 

13,244 

4,683 

4,720 

14,280 

24,300 

33,437 

15,011 

4,616 

12,072 

16,509 

11,987 

13,664 

20,651 

9,038 

13,070 

13,809 

8,513 

19,447 

19,411 

4,830 

16,376 

8,923 

3,581 

11,664 

16,056 

62,089 

99,191 

81,100 

fiscal  years  ending  June  30. 
Calendar  year. 


GAS  AND  FUEL  OIL 

Although  petroleum  and  its  products  were  doubtless 
used  for  fuel  from  the  very  beginning  of  the  industry,  fuel 
oil  was  first  reported  as  a  distinct  refinery  product  in  the 
census  for  1899  when  it  formed  14  per  cent,  of  the  crude 
run  to  stills.  Since  1914,  however,  gas  and  fuel  oil  has 
constituted  about  one-half  of  the  crude  refined.  Gas  oil, 
which  is  classified  with  fuel  oil,  is  a  high  grade  of  fuel  oil 
which  is  used  principally  by  public  utilities  for  the  manu- 
facture of  gas  for  illuminating  and  heating  purposes. 


PETROLEUM  AND  PRODUCTS         135 

Fuel  oil  competes  with  coal.  It  is  used  extensively  in 
the  southwestern  and  western  portions  of  the  United 
States  where  coal  is  lacking,  and  its  industrial  use  has  even 
penetrated  into  the  northeastern  section.  Although 
special  devices  are  necessary  to  burn  fuel  oil  the  labor- 
saving  in  stoking  and  in  avoiding  the  removal  of  ashes, 
added  to  the  cleanliness  of  its  use  and  the  reduction  in 
space  required  for  storage,  frequently  are  considered 
sufficient  to  offset  the  cost  of  installation  and  a  somewhat 
higher  unit  cost  than  for  coal. 

Because  of  the  saving  in  bunker  space  and  the  ease  of 
handling  it  fuel  oil  has  come  into  wide  use  on  shipboard. 
Time  spent  in  port  is  greatly  reduced  with  oil-burning 
ships,  thus  enabling  them  to  make  more  voyages  per  year. 
Approximately  three-fourths  of  the  United  States  Ship- 
ping Board  ships  in  operation  in  1921  were  oil  burners. 
Fuel  oil  stations  have  been  established  at  strategic  ports  on 
the  established  trade  routes  of  the  world  and  it  will  soon  be 
possible,  if  it  is  not  already  so,  for  ships  to  circle  the  globe 
wholly  by  means  of  fuel  obtained  at  these  stations.  It  is 
estimated  that  the  normal  minimum  requirements  of  the 
Shipping  Board  ships  alone  amount  to  30,000,000  barrels. 

The  fuel  oil  laden  at  ports  of  the  United  States  on  vessels 
engaged  in  foreign  trade  was  reported  first  for  the  fiscal 
year  1915,  when  2,898,000  barrels  were  so  used.  This 
increased  to  5,908,000  barrels  in  the  calender  year  1917 
and  6,603,000  in  1918.  In  1919  there  was  a  very  marked 
increase  to  14,031,000  barrels,  and  in  1920  to  26,335,000 
barrels.  During  1921,  27,076,000  barrels  were  furnished 
to  vessels  in  foreign  trade.  These  gains  were  all  the  more 
striking  since  the  use  of  coal  showed  little  change  be- 
tween 1916  and  1921. 


136          SOME  GREAT  COMMODITIES 

Railroads  used  37,763,000  barrels  of  fuel  oil  in  1919,  the 
latest  date  for  which  figures  are  available,  and  in  the  fiscal 
year  ending  June  30,  1921,  the  United  States  Navy  con- 
sumed 6,689,000  barrels.  Moreover,  in  1918  239,000,000 
gallons  or  5,690,000  barrels  of  crude  petroleum  were  used 
on  producing  properties,  chiefly  in  the  California  and 
Gulf  fields,  as  fuel  for  drilling  and  pumping. 

During  the  coal  strike  in  Great  Britain,  manufacturers, 
hotels  and  railroads  there  turned  to  the  use  of  fuel  oil  even 
though  handicapped  by  lack  of  equipment  for  storing  and 
burning  the  oil,  the  long  haul  from  producing  centers 
(chiefly  the  United  States,  Mexico  and  Trinidad)  and  the 
scarcity  of  railway  tank  cars  for  transportation  from  the 
ports  to  interior  points.  Since  the  settlement  of  the  strike 
many  of  these  firms  have  returned  to  the  use  of  coal,  but 
there  are  still  some,  especially  food  manufacturers  and 
hotels  where  cleanliness  is  especially  valuable,  which  find 
it  economical  to  continue  the  use  of  oil. 

The  exports  of  gas  and  fuel  oil  from  the  United  States 
go  mainly  to  industrial  countries  which  do  not  have  suf- 
ficient local  fuel  for  their  needs  or  to  countries  like  Chile, 
Panama  and  the  Philippine  Islands  which  serve  as  impor- 
tant fueling  stations  for  ships.  The  shipments  of  gas  and 
fuel  oil  to  the  leading  countries  to  which  the  United  States 
exported  before  the  war  and  in  1919,  1920  and  1921  are 
shown  in  Table  L.  The  two-year  period  1913-14  is  taken 
as  representative  of  pre-war  conditions  since  exports  of  gas 
and  fuel  oil  were  not  separately  reported  for  earlier  years. 

LUBRICANTS 

Lubricants  constitute  the  smallest  of  the  four  principal 
fractions  distilled  from  petroleum,  making  up  only  5 


Country 
United  Kingdom. 

11913-14 
(2-yr.  aver.) 

162,192 

Canada. 

79,928 

Chile.  .                    

67,905 

Panama  

34,313 

Netherlands  

10,072 

Italy.  . 

6,445 

France 

2,977 

Egypt  . 

869 

Mexico.                  

724 

French  Africa  

571 

Philippine  Islands  

10 

Other  countries  

31,831 

Total  

397,837 

Bunker,  vessels  in  foreign 
trade 

3 

Grand  total.  . 

3 

217,929 

304,729 

187,420 

105,700 

55,272 

24,188 

20,558 

19,615 

50,673 

36,887 

55,461 

29,729 

40,361 

52,758 

17,626 

2,330 

20,559 

45,826 

8,330 

35,661 

23,163 

17,797 

130,242 

169,841 

827,594 

845,061 

PETROLEUM  AND  PRODUCTS 

TABLE  L — EXPORTS  OF  GAS  AND  FUEL  OIL  FROM  THE  UNITED  STATES  TO 
FOREIGN  COUNTRIES 

»1919  »1920  »1921 

(in  thousands  of  gallons) 

197,279 
133,041 
41,677 
12,171 
25,418 
31,374 
8,918 
3,494 
16,825 

7,622 
107,031 
584,850 

589,317  1,106,065  1,137,198 
1,174,167  1,933,659  1,982,259 

iFiscal  years  ending  June  30. 

^Calendar  year. 

'Bunker  oil  not  reported.    In  fiscal  year  1915  shipments  were  121,733,000  gallons. 

per  cent,  of  the  total  crude  oil  run  to  stills.  The  percent- 
age, however,  varies  widely  in  different  sections  of  the 
country  in  accordance  with  the  types  of  crude  distilled. 
Lubricating  oils  and  greases  were  18  per  cent,  of  the  crude 
run  in  the  Pennsylvania  district  in  1921,  but  only  i  per 
cent,  of  that  run  in  Louisiana  and  Arkansas.  The  East 
Coast  district,  including  New  York,  Philadelphia  and 
Baltimore,  which  treats  Mexican  crude  as  well  as  oils 
from  various  fields  of  the  United  States,  obtained  6  per 
cent,  of  lubricants  from  the  oil  refined  in  1921.  As  this 
was  the  second  largest  proportion  obtained,  the  preemi- 
nence of  Pennsylvania  crude  as  a  source  for  lubricants  is 
apparent. 

Despite  the  relatively  small  quantities  of  lubricants  pro- 
duced the  United  States  regularly  exports  about  a  third 


138 


SOME  GREAT  COMMODITIES 


of  its  output.  Lubricants  thus  rank  second  to  kerosene 
in  the  relative  proportion  of  production  exported.  Table 
M  shows  the  amount  of  lubricating  oil  exported  to  the 
chief  foreign  customers  in  the  years  from  1910  to  1914  and 
in  1919,  1920  and  1921.  Lubricants  were  sent  primarily 
to  industrial  countries  lacking  sufficient  supplies  of  their 
own  but  shipments  were  made  to  almost  every  country  in 
the  world. 

TABLE  M— EXPORTS  OF  LUBRICATING  OIL  FROM  THE  UNITED  STATES  TO 
FOREIGN  COUNTRIES 


Country 


*1919 


*1920 


United  Kingdom. 

France 

Germany 

Netherlands 

Belgium 

Italy 

British  India.  . . . 

Argentina 

Sweden 

Other  countries . . 
Total.  . 


U910-14 
(5-yr.  aver.) 

(in  thousands  of  gallons) 

58,046 

23,046 
22,861 
11,524 
11,482 

8,185 

8,074 

4,207 

1,550 
42,376 


»1921 


191,351 


69,889 

118,908 

61,181 

42,510 

65,940 

38,781 

8,194 

34,530 

50,168 

10,561 

7,008 

4,446 

19,285 

27,031 

20,624 

13,958 

22,931 

20,478 

9,376 

9,374 

10,275 

6,495 

10,094 

7,923 

8,805 

10,300 

2,383 

85,722 

96,005 

73,058 

274J95 

402,121 

289,317 

fiscal  years  ending  June  30. 
"Calendar  year. 


Although  exports  of  all  petroleum  products  except  gas 
and  fuel  oil  fell  off  in  1921  as  compared  with  1920  the  de- 
cline was  most  marked  in  exports  of  lubricants.  The 
largest  decreases  were  in  shipments  to  the  United  Kingdom 
and  France,  but  there  were  declines  in  the  exports  to  all 
parts  of  the  world  except  British  India  and  Germany. 
Increased  exports  to  Germany  reflected  in  part  the  im- 
portation of  lubricants  into  Germany  in  bulk  for  reex- 
portation in  suitable  containers,  as  well  as  increased  in- 
dustrial activity  in  that  country.  The  general  falling  off 


PETROLEUM  AND  PRODUCTS         139 

of  exports  and  the  decrease  in  domestic  consumption  of 
lubricants  were  a  measure  of  the  world-wide  industrial 
depression. 

The  outstanding  features  in  the  markets  for  each  of  the 
principal  petroleum  products  in  1921  were  the  increased 
production  of  gasoline  to  keep  pace  with  the  gain  in  con- 
sumption, the  curtailed  output  of  kerosene,  the  increased 
production  of  gas  and  fuel  oil,  and  the  decrease  in  the  ex- 
ports of  lubricating  oil. 


RUBBER 

KIBBER  was  among  the  many  substances  dis- 
covered with  the  New  World.  Columbus  and 
the  Spanish  and  Portuguese  missionaries  who  fol- 
lowed him  reported  a  new  material  which  they  found  the 
natives  using  for  balls,  ornaments,  waterproof  shoes  and 
other  clothing.  Scientific  studies  of  rubber  were  not 
undertaken,  however,  until  French  interest  was  aroused 
by  specimens  gathered  by  La  Condamine  in  Ecuador  in 
the  first  half  of  the  eighteenth  century,  but  in  the  latter 
half  of  the  century  many  experiments  were  carried  on 
in  Great  Britain  and  the  United  States  as  well  as  in  France. 
At  some  time  between  1770  and  1780  Joseph  Priestly,  the 
English  chemist,  discovering  that  rubber  would  erase 
pencil  marks,  gave  it  its  English  name  from  this  property. 
In  1832  Ludersdorf  found  that  sulphur  added  to  a  solution 
of  crude  rubber  in  turpentine  rendered  it  non-adhesive. 
Seven  years  later  Charles  Goodyear  discovered  quite  by 
accident  that  when  heated  to  a  high  temperature  such  a 
solution  changed  the  characteristics  of  the  rubber  from  a 
sticky  unstable  material  to  the  vulcanized  rubber  as  it  is 
known  to-day. 

Although  rubber-waterproofed  garments  and  shoes  had 
been  made  in  Europe  prior  to  this  time,  the  vulcanization 
of  rubber  made  it  available  for  many  additional  uses. 
Rubber  hose  was  originated  by  Charles  Macintosh  and 
Thomas  Hancock  of  London.  A  patent  on  rubber  tires 

140 


RUBBER  141 

was  taken  out  by  Robert  William  Thompson  in  1845,  which 
was  followed  forty-three  years  later  by  a  patent  granted  to 
Dunlop  on  a  pneumatic  rubber  tire.  To-day,  from  erasers 
to  balloon  fabrics  and  from  spectacle  frames  to  street 
paving,  the  uses  of  rubber  are  countless  and  are  ever 
increasing. 

The  United  States  consumes  about  two-thirds  of  the 
world's  rubber,  but  except  for  a  relatively  small  amount 
grown  in  the  Philippines,  produces  none.  Until  1913 
Brazil  was  the  chief  source  of  rubber.  Since  then,  how- 
ever, the  cultivated  trees  in  the  Far  East  have  come  into 
bearing  so  that  now  the  plantations  furnish  nine-tenths 
of  the  supply.  Great  Britain,  through  ownership  either 
of  the  plantations  or  of  the  territories  where  estates  are 
located,  controls  about  four-fifths  of  the  plantation  output. 

Rubber  plantations  date  from  1876,  when  a  quantity 
of  the  seeds  of  the  Hevea  braziliensis  was  taken  from  Brazil 
to  the  botanical  gardens  at  Kew,  England,  sprouted  there, 
and  later  in  the  same  year  shipped  to  Ceylon.  Most  of 
the  rubber  trees  which  have  spread  throughout  the  East 
Indies  owe  their  origin  to  these  seeds,  though  rubber  is 
also  obtained  from  a  number  of  other  types  of  trees. 

India  rubber  is  obtained  from  the  latex  or  white  milky 
fluid  secured  from  rubber  trees  by  a  variety  of  methods 
of  tapping.  Different  methods,  also,  are  used  to  coagulate 
the  rubber.  In  South  America  the  rubber  is  ordinarily 
prepared  by  dipping  a  paddle  in  the  fluid  and  turning  it 
in  the  smoke  from  the  burning  of  oily  palm  nuts.  Planta- 
tion latex,  on  the  other  hand,  is  usually  placed  in  large 
vats  and  acetic  acid  or  lime  juice  is  added.  The  rubber, 
separated  in  a  spongy  mass,  is  washed,  dried,  cut  up  and 
passed  between  rollers  from  which  it  issues  in  the  form  of 


142 


SOME  GREAT  COMMODITIES 


sheets  or  crepe.  As  a  consequence  of  the  more  careful 
handling  plantation  rubber  comes  on  the  market  contain- 
ing only  about  3  per  cent,  moisture,  dirt  and  other  foreign 
matter,  while  the  native  rubber  sometimes  averages  as 
much  as  25  per  cent,  foreign  matter.  Nevertheless,  the 
native  Para  rubber  is  considered  superior  to  the  plantation 
product  and  is  preferred  for  many  uses. 

Table  A,  which  was  compiled  from  figures  published  by 
W.  H.  Rickinson  &  Son  of  London,  summarizes  the  world's 
rubber  production  from  1900  to  1921.  The  part  played 
by  plantation  rubber  in  bringing  about  the  remarkable 
increase  in  production  from  53,890  gross  tons  in  1900  to 
293,960  tons  in  1921  is  clearly  shown  by  these  figures. 


TABLE  A — WORLD  PRODUCTION  OF  CRUDE  RUBBER 


Plantation  Brazil 


1900. 
1901. 
1902. 
1903. 
1904. 
1905. 
1906. 
1907. 
1908. 
1909. 
1910. 
1911. 
1912. 
1913. 
1914. 
1915. 
1916. 
1917. 
1918. 
1919. 
1920. 


Native    areas 
other  than  Total 

Brazilian 
(amounts  are  in  gross  tons) 


4  26,750 

5  30,300 
8  28,700 

21  31,100 

43  30,000 

145  35,000 

510  36,000 

1,000  38,000 

1,800  39,000 

3,600  42,000 

8,200  40,800 

14,419  37,730 

28,518  42,410 

47,618  39,370 

71,380  37,000 

107,867  37,220 

152,650  36,500 

213,070  39,370 

255,950  30,700 

, . . .   285,225  34,285 

304,816  30,790 

1921 271,233  19,837 

iLess  than  1  per  cent. 


27,136 

53,890 

24,545 

54,850 

23,632 

52,340 

24,829 

55,950 

32,077 

62,120 

27,000 

62,145 

29,700 

66,210 

30,000 

69,000 

24,600 

65,400 

24,000 

69,600 

21,500 

70,500 

23,000 

75,149 

28,000 

98,928 

21,452 

108,440 

12,000 

120,380 

13,615 

158,702 

12,448 

201,598 

13,258 

265,698 

9,929 

296,579 

7,350 

326,860 

8,125 

343,731 

2,890 

293,960 

Per  cent 
plantation 


1 
1 

3 
5 
12 
19 
29 
44 
59 
68 
76 
80 
86 
87 
89 
92 


RUBBER  143 

PLANTATION  RUBBER 

Twenty  years  ago  practically  all  rubber  in  commercial 
use  was  what  is  known  as  "wild"  rubber.  It  was  pro- 
duced from  native  trees  and  vines  of  the  tropical  forests 
of  South  and  Central  America,  East  and  West  Africa  and 
Asia.  The  development  of  the  remarkably  efficient  plan- 
tations, however,  has  rendered  cultivated  rubber  trees  the 
dominant  factor  in  the  rubber  supply. 

The  best  estates  are  in  the  Federated  Malay  States  and 
on  the  east  coast  of  Sumatra.  Undertakings  in  Borneo 
also  are  very  productive.  Java,  on  account  of  its  periodic 
and  sometimes  prolonged  droughts,  is  less  well  suited  to 
rubber  production.  Ceylon,  which  is  now  cultivated  al- 
most to  the  limit,  lacks  the  soil  fertility  of  these  other 
regions  because  of  the  cultivation  of  other  crops  there 
for  years  before  the  rubber  tree  was  introduced.  South 
India  is  still  less  adapted  to  rubber  growing  since  it  com- 
bines the  handicaps  of  unreliable  climate  and  partially 
exhausted  soil.  Nevertheless,  in  the  Dutch  East  Indies, 
Ceylon  and  South  India  crops  other  than  rubber  are  grown 
on  the  estates  and  by  this  means  the  cost  of  rubber  pro- 
duction is  reduced  to  a  minimum. 

Table  B  shows  the  location  and  acreage  of  the  rubber 
plantations  on  January  i,  1920,  together  with  the  produc- 
tion and  the  yield  per  acre  in  1920.  It  is  to  be  noted  that 
the  production  figures,  being  from  an  independent  source, 
are  10  per  cent,  above  the  estimate  shown  in  Table  A 
for  the  same  year.  The  table  was  prepared  by  a  Royal 
Trade  Commission  that  recently  presented  its  report 
to  the  governor  of  the  Straits  Settlements.  The  high 
yield  per  acre  accredited  to  Ceylon  is  probably  to  be  at- 


144 


SOME  GREAT  COMMODITIES 


tributed  chiefly  to  the  age  of  the  trees  on  plantations 
there. 

TABLE  B — LOCATION  AND  AREA  OF  RUBBER  PLANTATIONS  ON  JANUARY  1, 
1920,  AND  PRODUCTION  IN  1920 


Country 
Malaya  

Area 
planted 
(acres) 

1,750,000 

Area  in 
bearing 
(acres) 

1,250,000 

Production 
(gross  tons) 

193,000 

Yield  per 
acre  in  bearing 
(pounds) 

346 

Dutch  East  Indies  
Ceylon                          . 

885,000 
398,000 

570,000 
267,000 

85,000 
42,000 

334 
352 

South  India.          

65,000 

43,000] 

Burma            

45,000 

17,500 

7,000 

259 

Borneo  and  Sarawak.  .  . 
Other  countries. 

50,000 
130,000 

30,000  j 
60,000 

8,000 

199 

Total.  . 

3,323.000 

2,237,500 

335,000 

335 

Next  to  the  British,  the  Dutch,  who  own  nearly  one- 
seventh  of  the  plantation  acreage,  are  the  principal  rubber 
growers.  The  French  and  the  Belgians  also  have  exten- 
sive holdings,  and  in  recent  years  American  rubber  manu- 
facturers have  entered  the  field,  so  that  now  they  own 
about  3  per  cent,  of  the  total  acreage.  Of  the  American 
estates,  157,000  acres  are  in  Sumatra  and  2,000  acres  are 
in  Java,  46,200  acres  being  planted  and  in  bearing,  22,800 
planted  but  not  yet  in  bearing,  and  90,000  being  held  in 
reserve. 

A  rubber  tree  begins  to  produce  when  about  five  years 
old  and  between  the  fifth  and  eighth  years  the  annual  pro- 
duction increases  from  three  to  four-fold.  Although  there 
probably  is  a  limit  to  the  productive  power,  experience 
has  not  yet  demonstrated  it.  Apparently  each  year  brings 
an  increased  yield.  Conservative  estimates  place  the  ul- 
timate annual  production  likely  to  be  attained  at  350 
pounds  an  acre. 

Due  to  the  lapse  of  five  years  between  the  planting  of 


RUBBER  145 

the  trees  and  their  coming  into  bearing  it  is  possible  from 
estimates  of  plantings  through  1921  to  approximate  the 
acreage  of  the  rubber  plantations  in  bearing  up  to  the  end 
of  1926.  As  no  estimates  are  available  as  to  the  abandon- 
ment of  acreage  due  to  conditions  brought  about  by 
the  overproduction  of  rubber,  no  allowance  can  be  made 
for  decreases  on  account  of  this  factor.  Table  C  has  been 
compiled  from  figures  published  by  W.  H.  Rickinson  & 
Son,  and  shows  the  acreage  of  plantation  rubber  trees  in 
bearing  at  the  close  of  each  year  from  1910  to  1926,  planta- 
tion rubber  production  and  yield  per  acre  from  1910  to 
1921  and  estimated  production  at  an  assumed  yield  of 
300  pounds  per  acre  from  1922  to  1926.  The  table  shows 
the  extent  to  which  production  was  curtailed  in  1921  to 
meet  the  economic  conditions  which  developed  in  that 
year.  Estimates  of  future  output  are  a  measure  of  the 
rubber  which  might  readily  be  obtained  should  the  need 
arise,  rather  than  forecasts  of  the  amount  which  will  ac- 
tually be  produced.  In  fact,  if  demand  becomes  insistent 
the  yield  may  be  considerably  greater  than  the  estimates 
shown. 

PRINCIPAL  RUBBER-CONSUMING  COUNTRIES 

Although  crude  rubber,  whether  produced  in  South  or 
Central  America,  Africa  or  the  East  Indies,  is  distinctly 
a  product  of  the  tropics,  it  is  manufactured  principally 
in  North  America  and  Europe.  Much  of  the  rubber  is 
shipped  directly  to  the  United  States,  the  chief  user,  but 
considerable  quantities  are  sent  also  to  the  United  King- 
dom, the  Netherlands  and  other  European  countries  which 
act  as  distributing  centers.  During  1919  and  1920  stocks 
of  raw  rubber  accumulated  in  the  United  States,  in  the  Far 


146          SOME  GREAT  COMMODITIES 

East  and  in  England  far  beyond  current  needs.  In  the 
second  half  of  1919  and  the  first  half  of  1920  imports  into 
the  United  States  were  very  heavy,  while  shipments  re- 
tained in  Great  Britain  were  relatively  light.  In  the  second 
half  of  1920  and  the  first  half  of  1921,  on  the  other  hand,  the 

TABLE  C — ACREAGE  AND  PRODUCTION  OF  PLANTATION  RUBBER 

Year 


1910. 
1911. 
1912. 
1913. 
1914. 
1915. 
1916. 
1917. 
1918. 
1919. 
1920. 
1921. 
1922. 
1923. 
1924. 
1925. 
1926. 


Acres  in  bearing 

Gross  tons  pro- 

Pounds 

at  close  of  year 

duced  during 

produced    per 

year 

acre  in  bearing 

116,500 

8,200 

158 

294,200 

14,419 

110 

506,550 

28,518 

126 

687,350 

47,618 

155 

861,150 

71,380 

186 

1,122,550 

107,867 

215 

1,505,350 

152,650 

227 

1,817,350 

213,070 

263 

2,021,750 

255,950 

284 

2,181,050 

285,225 

293 

2,293,750 

304,816 

298 

12,458,950 

271,233 

1247 

12,611,350 

2349,734 

2300 

12,759,950 

2369,636 

2300 

12,910,750 

2389,833 

2300 

13,020,750 

2404,565 

2300 

13,069,750 

2411,127 

2300 

*No  allowance  made  for  abandonment  of  acreage. 
'Estimated. 

United  States  reduced  its  imports.  As  a  consequence 
stocks  in  London  and  the  six  recognized  public  warehouses 
in  Liverpool  increased  from  27,744  gross  tons  at  the  end  of 
July,  1920,  to  82,844  tons  on  August  31,  1921.  Produc- 
tion was  greatly  curtailed  on  the  plantations,  and  raw 
rubber  was  even  used  as  fuel.  The  latter  part  of  1921 
showed  increased  imports  into  the  United  States,  decreases 
in  the  stocks  in  Great  Britain,  and  a  moderate  rise  in  prices 
for  crude  rubber.  Because  of  such  changes  in  conditions 
the  quantities  of  raw  rubber  retained  by  various  countries 


RUBBER  147 

give  but  a  poor  indication  of  the  rubber  consumption  of 
those  countries  in  any  particular  year.  Nevertheless,  the 
relative  position  of  a  country  as  a  consumer  of  crude  rub- 
ber can  be  approximated  by  its  net  imports  over  a  period 
of  years;  that  is,  by  its  imports  of  rubber  minus  its  exports. 
Table  D,  which  was  compiled  mostly  from  official  sources, 
shows  the  net  imports  of  crude  rubber  into  the  chief  con- 
suming countries  from  1913  to  1920.  Australia,  which  is 
not  included  in  the  table,  imported  about  3,000  tons  in 
1920.  Later  figures  are  not  available. 

It  should  be  recognized  that  the  figures  in  Table  D  are 
not  altogether  comparable.  Those  for  the  United  States 
relate  to  crude  india  rubber  only,  while  those  for  the 
United  Kingdom,  as  noted  in  the  table,  include  reclaimed 
and  waste  rubber  in  the  returns  for  1913  and  1914,  but 
for  later  years  relate  exclusively  to  crude  rubber.  Most 
of  the  countries  on  the  continent  of  Europe,  as  well  as 
Canada  and  Japan,  combine  figures  for  the  trade  in  gutta- 
percha  with  those  for  the  trade  in  india  rubber.  It  is 
likely,  moreover,  that  the  commerce  in  the  related  sub- 
stances, balata,  guayule  and  jelutong,  which  is  stated 
separately  in  the  trade  reports  of  the  United  States,  is  re- 
ported in  combination  with  that  of  india  rubber  in  the 
statistics  of  other  countries. 

Net  imports  of  india  rubber  into  the  United  States  in 
1921  were  69,000  tons  less  than  in  1920  but  were  over  four 
times  as  large  as  the  net  imports  into  the  United  Kingdom, 
the  next  largest  importer.  They  were  61  per  cent,  of  the 
total  estimated  production  in  1921  as  compared  with  72 
per  cent,  in  1920. 

The  sources  of  the  rubber  imported  into  the  United 
States  in  the  calendar  years  1919,  1920  and  1921,  as  com- 


i48          SOME  GREAT  COMMODITIES 

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RUBBER 


149 


pared  with  the  five  fiscal  years  from  July  i,  1909,  to  June 
30,  1914,  are  shown  in  Table  E.  Of  the  total,  77  per  cent, 
came  directly  from  the  East  Indies  in  1921,  as  compared 
with  only  8  per  cent,  before  the  war. 


STABLE  E— IMPORTS  OF  INDIA  RUBBER 

Country 


U910-14 
(5-yr.  aver.) 


Brazil 

United  Kingdom 

British  East  Indies: 

British  India 

Straits  Settlements. 

Other... 


Total  British  East  Indies 


17,987 
12,829 

11 

1,870 
1,831 


INTO  THE  UNITED  STATES 

*1919     »1920  «1921 
(in  gross  tons) 

26,270   16,510  10,390 

26,898   33,615  18,536 

2,186        1,579  921 

119,328    132,343  97,854 

25,640      23,188  20,846 


3,712        147,154    157,110    119,621 


Germany. 

Belgium 

France 

Netherlands 

Dutch  East  Indies. 
Other  countries. . 


Grand  total. 


3,244 

2,796 

1,482 

262 

59 

4,833 


642 

1,076        1,602 
1,178  395 


600 
261 
9,215 


27,348   32,310   23,666 
9,335   10,738   3,105 


47,204   239,259  252,922  185,394 


fiscal  years  ending  June  30. 
*Calendar  year. 


The  Rubber  Association  of  America  estimates  that  in 
all,  93  per  cent,  of  the  imports  in  1921  were  from  planta- 
tions ;  6  per  cent,  were  of  the  grades  known  as  Paras  and 
Caucho — that  is,  rubber  from  the  Amazon  district  of  Brazil 
and  rubber  from  Peru;  and  i  per  cent,  came  from  Africa. 
Guayule  rubber,  derived  from  the  guayule  shrub  of 
Mexico;  Centrals  from  Central  America;  and  Manicoba 
and  Matto  Grosso  rubber  from  the  southern  states  of 
Brazil  made  up  less  than  i  per  cent,  of  the  total.  In  1913 
plantation  rubber  made  up  47  per  cent,  of  the  imports, 
Paras  and  Caucho  36  per  cent.,  Guayule  5  per  cent., 


150          SOME  GREAT  COMMODITIES 

and  Africans,  Centrals,  and  Manicoba  and  Matto  Grosso 
combined,  12  per  cent. 

MANUFACTURES  OF  RUBBER 

Although  rubber  is  manufactured  into  a  great  variety 
of  different  articles,  one  American  concern  alone  being 
reported  as  making  nearly  30,000  different  products,  over 
two-thirds,  and  at  times  over  four-fifths,  of  all  the  crude 
rubber  consumed  in  the  United  States  enters  into  the 
manufacture  of  tires  and  tubes. 

In  the  course  of  rubber  manufacturing,  reclaimed  rubber 
is  utilized  in  combination  with  virgin  crude  rubber  to  an 
extent  that  varies  according  to  the  character  of  the 
product.  Out  of  503  questionnaires  sent  out  during  the 
war  inquiring  as  to  the  quantity  of  crude  and  reclaimed 
rubber  used  in  1917  for  different  purposes,  448  replies  were 
received.  The  results  were  as  summarized  in  Table  F. 
As  the  industry  was  operating  under  wartime  difficulties 
it  is  probable  that  as  much  reclaimed  rubber  as  practicable 
was  being  used.  Since  the  prices  of  crude  rubber  later 
fell  to  less  than  one-third  of  those  then  prevailing  the 
percentage  of  reclaimed  used  more  recently  may  well  be 
lower  than  in  1917.  Reclaimed  rubber,  however,  has  a 
definite  place  in  rubber  manufacture. 

More  recent  but  not  so  complete  information  as  to  the 
crude  rubber  used  in  the  industry  is  available  for  1921 
through  answers  to  questionnaires  covering  most  of  the 
industry.  According  to  this  report  tires  and  tire  sundries 
took  8 1  per  cent,  of  the  crude  rubber  used  by  the  firms 
replying,  mechanical  rubber  goods  6  per  cent.,  boots  and 
shoes  7  per  cent,  and  other  products  6  per  cent.  The. 
relative  amount  of  rubber  used  for  tires  and  tire  sundries 


RUBBER 

showed  an  increase  from  79  per  cent,  of  the  total  as  re- 
ported for  the  preceding  year. 

The  same  report  shows  that  the  amount  of  crude  rubber 
held  by  importers,  dealers  and  manufacturers  in  the 
United  States  on  December  31,  1921,  was  about  125,000 

TABLE  F— CONSUMPTION  OF  RUBBER  IN  THE  UNITED  STATES  IN  1917  BY 
ARTICLES  PRODUCED 


Total 


Crude 
rubber 


Reclaimed 
rubber 


(amounts  are  in  gross  tons) 


Per 
cent, 
crude 


91,161 
17,144 
14,717 
5,583 

76,336 
16,762 
11,686 
2,815 

128,605 

107,599 

46,121 
28,810 
11,189 
7,843 

14,171 
12,824 
2,684 
2,176 

3,908 
3,328 
1,470 
3,824 

3,732 
1,165 
1,462 
1,800 

!35,098 

147,613 

84 


Article 


Tires  and  tubes: 

Automobile  pneumatic  casings 

Automobile  pneumatic  tubes 

Solid  tires 

Motorcycle  and  bicycle  tires  and  tire  sundries 

Total 

Mechanical  rubber  goods  (belting,  hose,  pack- 
ing, etc.) 

Boots  and  shoes 

Insulated  wire  and  insulating  compounds 

Waterproof  clothing,  cloth  and  sheeting 

Druggists'  and  stationers'  sundries  and  surgical 

rubber  goods 

Hard  rubber  goods 

Rubber  cement 

Miscellaneous 

Grand  total 


tons  or  nearly  eight  months'  supply  at  the  rate  of  consump- 
tion reported  for  the  last  half  of  the  year.  Four  months' 
supply  is  regarded  as  a  normal  amount  of  crude  rubber 
in  the  hands  of  traders  and  manufacturers  under  usual 
conditions. 

Since  November,  1920,  a  varying  number  of  manufac- 
turers have  reported  their  production,  shipments  and 
stocks  of  tires  and  tubes  to  the  Rubber  Association  of 
America.  It  is  stated  that  the  returns  received  for  the 
later  months  are  considered  to  cover  over  80  per  cent, 
of  the  industry.  The  reports  for  casings  and  tubes,  which 
accounted  for  57  and  16  per  cent.,  respectively,  of  the  rub- 
ber consumed  in  1921,  were  as  shown  in  Table  G. 


152          SOME  GREAT  COMMODITIES 

TABLE  G — PRODUCTION,  DOMESTIC  SHIPMENTS  AND  STOCKS  OF  TIRES  AND 
TUBES  IN  THE  UNITED  STATES 


Month 


1920  November. 
December. 

1921  January.  .  . 
February.  . 
March.  .  .  . 


June  ...... 

July  ...... 

August.  .  .  . 

September. 
October  .  .  . 
November. 
December. 


1920  November. 

December. 

1921 


January.  . 
February. 


March. 

April 

May 

June 

July 

August.  .. . 
September. 
October.  . . 
November. 
December. 


Number  of 

manufacturers 

reporting 

36 
43 
45 
45 
46 


63 
63 
66 
63 
64 
64 
64 


40 
43 
47 
46 
48 
51 
57 
60 
61 
64 
62 
64 
63 
64 


Production 

upmesi 

(000  omitted) 

shipmer 

PNEUMATIC 

CASINGS 

650 

806 

506 

1,327 

703 

965 

820 

1,074 

1,163 

1,615 

1,651 

1,786 

2,101 

2,086 

2,313 

2,644 

2,571 

2,758 

3,043 

2,894 

1,929 

2,048 

1,928 

1,675 

1,757 

1,343 

1,840 

1,980 

INNER  TUBES 

743 

921 

508 

1,481 

741 

1,043 

917 

1,130 

1,346 

1,644 

1,762 

1,984 

2,210 

2,343 

2,360 

3,233 

3,021 

3,603 

4,430 

3,804 

3,275 

2,646 

2,844 

2,016 

2,126 

1,540 

2,070 

2,523 

Stocks  at 
end  of  month 
(000  omitted) 

5,880 
5,508 
5,320 
5,193 
4,597 
4,527 
4.452 
4,154 
3.892 
3,935 
3,341 
3,545 
3,908 
3,697 


6,132 
5,787j 
5,586 
5,415 
5,045 
4,917 
4,752 
3,835 
3,123 
3,649 
3,828 
4,732 
5.204 
4.731 


The  chemistry  of  rubber  manufacture  is  very  compli- 
cated, since  many  substances  besides  rubber  enter  into 
rubber  products.  The  development  so  far  reached  is  for 
the  most  part  the  achievement  of  the  American  rubber 
industry.  The  process  of  vulcanization,  the  basis  of  all 
rubber  manufacture,  calls  for  the  use  of  sulphur,  2\  to 
10  per  cent,  if  soft  rubber  is  to  be  made,  or  about  33 \  per 
cent,  if  hard  rubber  is  desired.  In  addition  different 
colors  and  qualities  are  obtained  by  using  varying  quan- 
tities of  many  different  compounding  ingredients. 

Raw  rubber,  especially  that  from  native  sources,  must 
be  washed  to  remove  the  impurities.  It  is  afterward  dried 
?nd  then  put  into  a  mixer  where  the  compounding  ingredi- 


RUBBER  153 

ents  are  incorporated  with  it.  The  kind  of  further  treat- 
ment depends  upon  whether  the  product  is  to  be  molded, 
hand-made  from  sheets,  or  dipped.  The  material  may  be 
shaped  like  dough  and  then  vulcanized,  it  may  be  made 
into  sheets  which  are  later  made  into  the  desired  articles, 
or  it  may  be  dissolved  in  benzine  or  gasoline  for  use  in 
dipping.  Surgeons'  gloves,  toy  balloons  and  similar  articles 
are  made  by  dipping  a  form  of  the  proper  shape  into  such 
a  solution. 

Many  of  the  uses  of  rubber  depend  upon  its  being  rein- 
forced by  fabrics.  Cotton  fabric  gives  rubber  belting 
its  tensile  strength  and  body.  The  framework  of  the  auto- 
mobile tire  is  built  up  of  cotton  fabric  or  cords.  Water- 
proof clothing  is  made  of  rubberized  fabric.  Rubber 
boots  and  shoes  are  made  from  rubber-coated  cloth.  The 
two  processes  of  combining  cloth  with  rubber  are  known 
as  "frictioning"  and  "spreading."  Frictioning  forces 
the  rubber  into  the  cloth,  while  spreading  lays  a  thin 
coat  of  rubber  over  it. 

The  development  of  the  rubber  industry  in  the  United 
States  is  far  ahead  of  that  in  any  other  country.  Conse- 
quently, the  course  of  the  American  export  trade  in  rubber 
goods  reflects  to  a  large  extent  the  demand  for  rubber 
products  throughout  the  world.  The  increase  in  value 
of  products  exported  in  1920  over  previous  years  was  very 
marked,  as  was  also  the  falling  off  in  1921  due  to  the  world- 
wide industrial  depression. 

The  domestic  market,  however,  absorbs  the  bulk  of 
American  rubber  products.  The  latest  census  of  manu- 
factures, that  for  1919,  showed  that  products  to  the  value 
of  $1,138,000,000  were  manufactured,  but  exports  in 
that  year  were  valued  at  only  $53,866,000  or  less  than 


154 


SOME  GREAT  COMMODITIES 


5  per  cent,  of  the  production.  The  total  value  of  prod- 
ucts was  estimated  at  $896,000,000  in  1917  when  the 
value  of  exports  was  $34,789,000  or  less  than  4  per  cent, 
of  the  output. 

Table  H  shows  by  classes  of  goods  the  value  of  the  ex- 
ports of  rubber  manufactures  from  the  United  States  in  the 
calendar  years  1919,  1920  and  1921  as  compared  with  the 
annual  average  for  the  five  fiscal  years  from  July  i,  1909, 


TABLE  H— VALUE  OF  EXPORTS  OF  MANUFACTURES  OF  INDIA  RUBBER 
FROM  THE  UNITED  STATES 


Article 


U910-14 
(5-yr.  aver.) 


»1919        »1920 


»1921 


(in  thousands  of  dollars) 


Automobile  tires: 

Casings 3                  3        43,899  13,422 

Inner  tubes «                  «          4313  i>232 

Solid  tires 3,332  1,300 

Total..  *3M8         28,925    52,044  15,954 

All  other  tires 4579           1,557      1,030  359 

Boots  and  shoes: 

Boots 3                 715      1,012  568 

Shoes 3               4,551      9,738  2,829 

Total..  1,652           5,266    10,750  3J97 

Solesandheels 984  512 

Belting,  hose  and  packing: 

Belting «                  3         3,532  1,446 

Hose..  3                  3          3,341  1,945 

Packing 1,525  716 

Total 2,284           6,100      8,398  4,107 

Druggists' rubber  sundries. .  3               1,271      1,891  875 

Reclaimed  rubber 792               840         829  155 

Scrap  and  old  rubber 712              809         788  424 

All  other  rubber  manufactures 3,376           9,098      8,723  5,003 

Grand  total 12,443        53,866    85,437  30,786 

ipiscal  years  ending  June  30. 
^Calendar  year. 
»Not  reported  separately. 
«Four-year  average,  1911-14. 


RUBBER 


155 


to  June  30,  1914.  Over  two-fifths  of  the  value  of  the 
exports  in  1921  was  made  up  by  the  value  of  the  exports 
of  automobile  tire  casings,  while  about  one-tenth  was  com- 
posed of  the  value  of  rubber  shoes  exported.  Changes 
in  the  price  level  were,  of  course,  a  factor  in  the  increase  of 
1919  and  1920  valuations  over  those  for  the  five-year  aver- 
age, and  the  decline  shown  for  1921  as  compared  with  1920. 
The  value  of  automobile  tire  exports  showed  a  larger 
decline  in  1921  as  compared  with  1920  than  the  value  of 
the  exports  of  any  of  the  other  major  rubber  products. 
Much  of  the  decrease  was  due  to  the  lowered  prices  for 


TABLE  I— VALUE  OF  EXPORTS  OF  AUTOMOBILE  TIRES  FROM  THE  UNITED 

STATES 


Country 

Belgium 

Denmark 

France 

Germany 

Netherlands 

Norway 

Spain 

Sweden 

United  Kingdom 

Canada 

Mexico 

Cuba 

Argentina 

Brazil 

British  India 

Straits  Settlements. . . 
Dutch  East  Indies. . . 

Australia 

New  Zealand 

Philippine  Islands. . . . 
British  South  Africa.. 

Other  countries 

Total.. 


U911-14 
(4-yr.  aver.) 

118 
7 

132 

141 

1 

2 

1 

25 

1,228 

847 

152 

29 

11 

24 

1 

2 

3 

45 

20 

102 

15 

142 

3,048 


21919 


21920 


»1921 


(in  thousands  of  dollars) 


533 

1,279 

74 

1,254 

959 

279 

3,535 

2,369 

384 

33 

577 

13 

1,044 

1,813 

112 

846 

1,430 

320 

825 

1,925 

312 

1,374 

2,619 

568 

1,509 

4,330 

3,357 

1,021 

2,704 

1,045 

806 

1,439 

1,365 

2,013 

3,410 

1,362 

1,788 

3,127 

838 

1,018 

1,965 

227 

557 

1,096 

391 

636 

1,109 

112 

687 

1,713 

502 

752 

1,498 

261 

1,024 

2,256 

615 

1,373 

2,431 

657 

480 

1,778 

256 

5,817 

10,217 

2.904 

28,925 

5^044 

1^954 

^Fiscal  years  ending  June  30. 
•Calendar  year. 


i56 


SOME  GREAT  COMMODITIES 


tires  but  it  is  probable  also  that  the  number  of  tires  ex- 
ported to  most  countries  decreased.  The  values  of  the 
automobile  tire  exports  from  the  United  States  in  the  four 
fiscal  years  from  1911  to  1914,  and  in  the  calendar  years 
1919,  1920  and  1921  are  shown  by  countries  of  destina- 
tion in  Table  I.  The  pre-war  average  is  confined  to  four 
years  because  the  exports  for  1910  were  not  reported 
separately. 

Table  J  shows  the  number  of  pairs  of  rubber  shoes  ex- 
ported from  the  United  States  in  the  fiscal  year  ending 
June  30,  1913,  and  in  the  calendar  years  1919,  1920  and 
1921  by  principal  countries.  Rubber  shoes  were  first 
itemized  separately  in  the  official  returns  for  the  fiscal  year 
1913;  therefore  the  statistics  for  the  single  year,  rather 
than  an  average  of  a  number  of  pre-war  years,  are  shown. 

TABLE  J— EXPORTS  OF  RUBBER  SHOES  FROM  THE  UNITED  STATES 

Country 


Denmark 

Finland 

France 

Germany 

Norway 

Turkey  in  Europe .... 

United  Kingdom 

Canada 

Cuba 

Brazil 

Japan 

Australia 

Other  countries 

Total.. 


U913 

*1919 

*1920 

*1921 

(in 

pairs) 

52,776 

500,219 

414,933 

105,634 

48 

73,852 

448,011 

124 

54,252 

75,281 

426,158 

7,030 

237,409 

1,007 

17,937 

94 

28,735 

951,146 

1,412,739 

259,418 

109,790 

427,887 

546,488 

36,219 

757,404 

1,053,842 

2,073,418 

194,910 

82,624 

131,222 

119,966 

33,221 

1,386 

350,159 

1,229,909 

292,810 

76,031 

92,834 

269,023 

54,153 

46,717 

393,679 

400,880 

257,779 

340,938 

151,673 

60,334 

8,558 

443,357 

1,591,687 

2,668,715 

1,418,900 

2,231,467    5,794,488     10,088,511    2,668,850 


fiscal  year  ending  June  30. 
*Calendar  year. 


TREND  OF  RUBBER  PRICES 


The  whole  story  of  the  development  of  the  rubber  in- 
dustry is  reflected  in  the  price  quotations  for  the  crude 


RUBBER 


157 


material.  The  prices  of  the  leading  grades  of  plantation 
and  Para  rubber  in  New  York  are  shown  by  months  from 
1913  through  1921  in  Table  K.  The  table  shows  a  de- 
cline in  1913  followed  by  fluctuating  prices  with  a  general 
trend  neither  up  nor  down  during  the  war,  a  movement 
which  was  succeeded  in  turn  by  a  decline  in  1919,  becom- 
ing precipitous  in  1920  and  the  first  part  of  1921.  This 
movement  was  followed  by  a  moderate  recovery  toward 
the  end  of  1921. 

TABLE  K  —  WHOLESALE  PRICES  OF  CRUDE  RUBBER  IN  NEW  YORK  FOR 
AVAILABLE  DATE  NEAREST  THE  FIRST  OR   FIFTEENTH  OF   EACH 
MONTH,  1913  TO  1921,  IN  CENTS  PER  POUND 


Month 


U913      »1914     U915     U916     U917      »1918     *1919     »1920     21921 


January 11 

February 104 

March 

April 

May 

June 

July 

August 

September.  . . . 

October 

November.  . . . 
December 


Plantation—  First  Latex  Crgpe 
86*        99*         79          57          55 


58 


56 


55* 

57 

60 

63 

63 

63 

63 

63 

59 

63 

62* 


February 

104^ 

75 

60* 

March 

96 

58? 

April  

92^ 

744 

58 

May 

82^ 

60 

June  

90J 

70^ 

61 

July. 

87^ 

68 

621 

August  

85^ 

\         72 

60i 

September  
October 

77\ 

57 
57* 

November  

73J 

654 

56J 

December.  ..... 

76j 

71 

68 

Para — Upriver  Fine 
87*        78          58 
76          77 
77*        80 
74i        76* 
70i 


37 

40 

43 

55 

51 

54* 

52 


60 


55 
56 
56 
55 


53 
52 

47* 


»Prices  as  of  first  of  month. 
2Prices  as  of  fifteenth  of  month. 


The  fall  in  the  price  of  rubber,  which  has  been  more  or 
less  steadily  in  progress  since  the  high  price  of  $3.00  a 
pound  was  reached  in  the  spring  of  1910,  was  checked  at 


158          SOME  GREAT  COMMODITIES 

the  outbreak  of  the  war  by  the  uncertainty  of  receiving 
continuous  supplies  of  crude  rubber  from  overseas,  and 
by  the  increased  demand  for  rubber  products  for  war  pur- 
poses. At  the  close  of  the  war  the  increased  output  of  the 
plantations  together  with  about  55,000  tons  of  the  1918 
production,  which  had  been  kept  in  the  Far  East  by  the 
scarcity  of  shipping,  came  on  the  market  and  broke  the 
price.  In  1920-21  the  business  depression  which  was  re- 
flected in  the  falling  prices  for  other  commodities  also 
had  its  effect. 

The  peak  price  for  rubber  reached  in  1910  was  due  to  its 
greatly  increased  use  for  automobile  tires,  a  use  which  up 
to  that  time  had  developed  much  more  rapidly  than  the 
output  of  the  plantations.  The  years  1909  and  1910, 
moreover,  were  the  period  when  the  valorization  scheme, 
familiar  to  Brazilians  in  the  case  of  coffee,  was  applied 
to  Para  rubber,  and  an  attempt  was  made  to  corner  the 
rubber  market.  Great  excitement  prevailed  in  the  rubber 
trade  at  this  time  because  the  plantations  were  proving 
so  profitable  that  there  was  a  great  speculative  boom  in 
rubber  planting,  company  after  company  being  floated 
in  London  for  this  purpose.  The  price  in  1910  was  the 
culmination  of  a  gradual  upward  movement  which  had 
been  in  progress  since  early  in  1908,  when  a  price  of  67 J 
cents  a  pound  for  upriver  fine  Para  had  been  reached  in  a 
gradual  decline  from  an  average  of  $i.28|  in  1905. 

Although  the  low  rubber  prices  prevailing  in  1921  were 
partially  due  to  the  world-wide  business  depression  and 
also  were  influenced  by  the  lack  of  buying  power  in  Europe, 
particularly  on  the  part  of  Germany  and  Russia,  both 
large  consumers  before  the  war,  the  slump  was  primarily 
due  to  overproduction. 


RUBBER  159 

From  the  latter  part  of  1920  through  1921  prices  for  rub- 
ber at  New  York  were  below  the  cost  of  production  on  many 
plantations.  To  remedy  this  situation  a  voluntary  scheme 
of  curtailment  of  output  by  25  per  cent,  was  undertaken 
beginning  November  i,  1920,  by  a  considerable  group  of 
plantation  operators.  Growers  in  Malaya  went  even 
further  by  requesting  the  local  authorities  for  legislation 
to  restrict  production  by  50  per  cent.  As  there  is  a  large 
acreage  in  Chinese  and  native  hands  it  was  felt  that  legis- 
lation was  necessary  to  enforce  reduction  of  output  other 
than  the  restriction  naturally  brought  about  by  the  low 
price  for  rubber  and  the  expense  of  storing  it.  The  agree- 
ment for  restriction  of  output  lapsed  at  the  end  of  1921. 

Curtailed  output  may  bring  relief  to  the  growers  tem- 
porarily but  the  chief  hope  for  permanent  benefit  lies  in 
the  fact  that  rubber  is  a  comparatively  new  commodity 
for  which  new  uses  are  constantly  being  developed.  This 
extension  is  bound  to  progress  as  long  as  crude  rubber 
remains  relatively  cheap.  Already  it  is  coming  into  use 
as  a  road  paving  and  in  the  form  of  hard  rubber  wood  it  is 
being  increasingly  substituted  for  ordinary  wood  with 
satisfactory  results.  The  time  when  common  articles  of 
furniture  will  be  made  from  rubber  may  not  be  far  distant. 
The  next  few  years  may  also  see  sponge  rubber  widely 
used  in  upholstery,  rubber  in  liquid  form  incorporated  in 
paints,  rubber  used  in  linoleum,  in  paper,  and  in  many 
other  novel  ways.  At  any  rate,  it  should  be  borne  in  mind 
that  rubber  manufacture  is  a  comparatively  young  indus- 
try which  has  wonderful  possibilities. 


SILK 

SILK,  which  but  a  few  decades  ago  was  regarded 
as  an  article  of  luxury  to  be  used  only  by  the  very 
wealthy,  within  a  comparatively  short  period  has 
assumed  a  prominent  position  among  the  important  textile 
fibers.  The  increase  in  the  world's  supply  of  raw  silk, 
from  a  total  of  approximately  45,000,000  pounds  in  1900 
to  77,000,000  pounds  in  1919,  tells  graphically  the  story 
of  the  growing  popularity  of  the  graceful  fabrics  obtained 
from  it. 

Asia  and  southern  Europe  are  the  sources  of  the  world's 
raw  silk  supply.  The  chief  silk-producing  countries  of 
the  world  are  China,  Japan,  Italy,  the  Mediterranean 
coastlands  of  eastern  Europe  and  of  Asia  Minor  and  Syria, 
commonly  classed  together  as  the  Levant,  and  France. 
A  small  amount  of  silk  is  produced  also  in  Spain,  India, 
Austria  and  Hungary. 

The  rapid  rate  of  increase  in  Japanese  production,  and 
the  surprisingly  large  proportion  which  it  forms  of  the 
world  total,  are  shown  in  Table  A,  which  gives,  by  prin- 
cipal countries,  world  production  of  raw  silk  from  1910 
to  1921.  Amounts  are  for  fiscal  years  ending  June  30, 
except  in  the  case  of  Japan,  where  production  figures  are 
available  for  the  calendar  year  only. 

Japan's  raw  silk  output  reached  its  peak  in  1919  when 
it  formed  more  than  two-thirds  of  the  world's  supply  for 
that  year,  and  showed  a  gain  of  about  23,000,000  pounds 
over  the  1910-14  average.  Because  of  world-wide  condi- 

160 


SILK 


161 


tions  of  depression,  production  in  1920  decreased  by  about 
4,000,000  pounds,  and  reports  of  silk  production  in  1921 
show  a  further  decline. 

TABLE  A — WORLD  PRODUCTION  OF  RAW  SILK  FOR  THE  YEARS  ENDING 
JUNE  30, 1909,  TO  1921 


Country 


1910-14 
(5-yr.  aver.) 


1915 


1916        1917        1918        1919 
(in  thousands  of  pounds) 


1920         1921 


japan1 

29,318 

33,448 

37,367 

43,962 

47,914 

52,578 

48,230 

45,642 

China8  
Italy 

17,643 
8,523 

12,880 
8,951 

16,475 
6,349 

16,612 
7,963 

15,267 
6,217 

14,474 
5,942 

19,278 
4,045 

12,379 
7,330 

Levant8  

5,832 

3,935 

2,293 

2,293 

2,293 

2,293 

2,293 

1654 

France 

990 

893 

286 

485 

452 

540 

397 

551 

Austria3  

726 

666 

331 

331 

331 

331 

331 

Spain  

180 

161 

121 

198 

154 

165 

154 

177 

India*  

434 

110 

220 

194 

243 

254 

320 

110 

Total 63,646       61,044     63,442     72,038     72,871     76,577     75,048     67,843 

1Calendar  year. 

2Exports  only. 

^Production  for  1916  to  1920  estimated. 

'Estimated. 

It  is  known  that  Chinese  silk  production  is  extremely 
large,  but  there  are  no  accurate  statistics  on  the  subject. 
Consequently,  figures  given  are  for  exports  only.  After 
1914  exports  underwent  an  almost  steady  decline  until 
1920  when  they  exceeded  the  1910-14  average  by  about 
1,600,000  pounds.  The  amount  of  silk  exported  in  the  year 
ending  June  30, 1921,  however,  fell  below  the  pre-war  level. 
The  Chinese  silk  export  is  affected  to  a  large  extent  by  the 
price  of  silver.  When  this  is  low,  the  Chinese  exporter 
appears  to  be  at  an  advantage,  but  when  silver  is  high, 
exports  decline,  and  the  slack  is  taken  up  by  domestic 
consumption  of  silk,  which  is  exceedingly  elastic.  It  is 
estimated  that  the  Chinese  ordinarily  consume  over  half 
of  the  silk  which  they  produce. 

Production  in  Italy,  France  and  the  Levant  decreased 
greatly  during  the  war  and  has  not  yet  regained  its  former 
volume,  although  the  Italian  output  showed  a  marked 


1 62          SOME  GREAT  COMMODITIES 

increase  in  1921 .  Even  before  the  war,  production  in  Italy 
and  France  was  falling  off  in  spite  of  governmental  boun- 
ties. This  was  due  in  part  to  the  generally  lower  price 
of  silk  which  prevailed  and  in  part  to  the  competition 
of  eastern  silks  coupled  with  an  increasing  difficulty  of 
competing  with  cheaper  labor. 

HISTORY  OF  SILK 

Silk  was  first  produced  in  China.  The  mention  of  silk 
occurs  many  times  in  ancient  Chinese  history,  dating  back 
almost  to  time  immemorial.  Of  the  many  legendary 
versions  of  the  beginning  of  sericulture,  perhaps  the  most 
interesting  is  that  which  attributes  its  discovery  to  Hsi- 
Ling-Shih,  the  wife  of  the  Emperor  W'Hang.  This  enter- 
prising young  empress  collected  silkworms,  fed  them, 
learned  how  to  reel  silk  from  the  cocoons,  and  even  to 
make  it  into  fabrics.  For  this  she  was  deified,  and  was 
known  as  the  "Goddess  of  Silkworms." 

Sericulture  became  a  national  industry,  but  the  Chinese 
kept  their  method  of  obtaining  silk  a  secret  for  over 
3,000  years,  although  they  sold  woven  silk  to  the  Persians, 
who,  without  knowing  how  or  from  what  it  was  made, 
carried  it  to  the  western  nations.  No  one,  on  pain  of 
death,  was  allowed  to  export  silkworm  eggs  from  China. 
The  only  form  of  silk  manufacturing  in  countries  other 
than  China  was  accomplished  by  unravelling  and  reweav- 
ing  silken  goods  brought  from  China. 

In  289  A.  D.  four  Chinese  girls  went  to  Japan  and 
taught  the  secret  of  silk  making  in  that  country.  Seri- 
culture was  first  brought  to  India  about  300  A.  D.  by  a 
young  Chinese  princess,  who  at  the  time  of  her  marriage 
to  an  Indian  potentate  carried  to  her  new  home  silkworm 


SILK  163 

eggs  concealed  in  her  headdress.  From  India,  the  indus- 
try gradually  spread  to  Persia  and  central  Asia.  As  late 
as  500  A.  D.  silk-making  was  still  unknown  in  Constan- 
tinople. About  550  A.  D.,  during  the  reign  of  the  Em- 
peror Justinian,  two  Nestorian  monks  brought  the  secret 
to  Constantinople,  having  concealed  silkworm  eggs  in 
their  staves.  Silk  was  introduced  into  the  remainder  of 
southern  Europe  largely  as  a  result  of  wars,  the  process 
being  taught  by  prisoners  of  war. 

Sericulture  has  always  been  sought  as  a  national  asset. 
The  value  of  the  industry  is  suggested  by  the  fact  that 
during  fifteen  years  in  the  middle  of  the  last  century  losses 
caused  by  silkworm  disease  in  France  and  Italy  alone  have 
been  estimated  at  more  than  a  half  billion  dollars.  Al- 
though climate  is  an  important  factor  in  successful  silk 
production,  the  overwhelming  importance  of  a  plentiful 
supply  of  cheap  skilled  labor  becomes  evident  by  a  brief 
survey  of  the  industry.  For  this  purpose,  the  work  may  be 
divided  into  two  general  branches:  the  production  of 
cocoons,  and  the  reeling  of  silk  from  the  cocoons  into 
skeins  of  raw  silk. 

PROCESS  OF  SILK  RAISING 

The  production  of  cocoons  includes  the  raising  of  mul- 
berry trees  in  order  to  obtain  the  leaves  as  food  for  the 
silkworms,  the  care  of  the  worms  from  the  time  they  are 
hatched  until  the  cocoon  is  spun  and  the  producing  of 
silkworm  eggs  for  further  reproduction.  In  parts  of  the 
world  where  undomesticated  silkworms  are  numerous, 
much  time  is  spent  also  in  collecting  these  cocoons.  Both 
in  Europe  and  the  East,  cocoon  production  is  carried  on 
largely  as  a  home  industry  by  the  farming  population. 


1 64          SOME  GREAT  COMMODITIES 

The  silkworm  known  as  the  Bombyx  mori  produces 
the  largest  amount  of  the  world's  silk,  as  well  as  the  silk 
of  best  quality.  It  has  been  domesticated  for  centuries. 
The  cocoons  of  numerous  species  of  wild  silkworms  found 
in  Asia  are  also  used,  the  silk  being  classed  under  the 
general  name  of  tussah.  The  egg  of  the  silk  moth  is 
about  the  size  of  the  head  of  a  small  pin.  Hatching  is 
done  artificially  in  order  that  it  may  be  simultaneous. 
The  worms  are  kept  on  trays  for  convenience  in  handling 
and  require  a  great  deal  of  attention.  As  the  worms  must 
have  an  even,  mild  temperature  and  plenty  of  ventilation, 
frequently  at  this  period  the  farmer  and  his  family  move 
out  into  the  courtyard,  giving  up  the  entire  house  to  them. 
Fresh  mulberry  leaves  must  be  supplied  to  the  worms  as 
soon  as  the  old  ones  are  eaten.  These  leaves  are  carefully 
selected,  as  the  quality  of  the  silk  is  directly  affected  by 
the  kind  of  food  consumed.  The  exacting  work  of  cocoon 
production  yields  very  little  profit.  Women  who  care 
for  the  worms  from  daylight  until  night  earned,  before 
the  war,  only  six  or  seven  cents  a  day  in  Italy;  and  in 
Japan  and  China  the  return  for  this  labor  was  sometimes 
as  low  as  two  or  three  cents.  Wages  have  risen  since 
that  time  but  are  still  low  as  compared  with  compensation 
received  for  similar  types  of  work  in  many  other  parts  of 
the  world. 

In  spite  of  constant  care,  silkworms  are  subject  to 
several  diseases.  In  Italy  and  France,  and  to  a  lesser 
extent  in  Japan,  sericulture  is  highly  specialized  work.  In 
Italy,  particularly,  it  is  said  that  the  rearing  of  silkworms 
is  as  well  developed  an  industry  as  is  the  breeding  of  fine 
horses  in  other  countries.  The  Chinese,  however,  lose  large 
numbers  of  worms  each  year  through  unscientific  treatment. 


SILK  165 

In  a  little  over  a  month  after  hatching,  having  attained 
its  full  growth  of  about  three  and  one-half  inches  in  length 
and  one-quarter  inch  in  thickness,  the  worm  begins  the 
spinning  of  its  cocoon.  The  silk  fluid,  in  the  form  of  a 
clear  mucilage,  is  expressed  from  the  underlip  in  two 
strands,  which  harden  in  the  air,  and  unite  to  form  the 
silk  filament.  In  about  three  days  the  cocoon  is  com- 
pleted. It  is  tough,  strong  and  compact,  oval  in  form  and 
about  one  to  one  and  one-half  inches  long,  with  walls 
about  one  sixty-fourth  of  an  inch  thick  of  firm,  con- 
tinuous thread.  Within  a  fortnight  after  spinning  the 
cocoon,  the  worm,  which  in  the  meantime  has  changed 
into  a  chrysalis,  emerges  as  a  moth.  The  cycle  from  first 
to  last,  including  all  transformations,  is  less  than  sixty 
days.  The  escape  of  the  moth  from  the  cocoon  breaks 
so  many  threads  that  the  cocoons  are  ruined  for  reeling, 
or  the  unwinding  of  the  silk  filament.  Consequently, 
when  a  few  days  old,  all  the  cocoons  except  those  intended 
for  reproduction  are  placed  in  heating  ovens  to  stifle  the 
chrysalides.  After  this  the  cocoons  are  thoroughly  dried 
out,  losing  two-thirds  of  their  weight,  and  the  reeling  may 
then  be  done  at  any  future  time. 

REELING  SILK  INTO  SKEINS 

After  the  cocoons  have  been  carefully  sorted,  according 
to  size,  etc.,  they  are  ready  to  be  reeled.  Reeling  is  a  slow, 
tedious  process.  To  obtain  one  pound  of  raw  silk  about 
four  pounds  of  dried  cocoons,  equal  to  from  2,500  to 
3,000  cocoons,  must  be  reeled,  and  so  delicate  is  the  silk 
filament  that  a  number  of  cocoons  must  be  reeled  together 
to  make  the  strand  of  raw  silk  strong  enough  for  any 
commercial  purpose.  As  a  rule,  filaments  from  five  or  six 


1 66          SOME  GREAT  COMMODITIES 

cocoons  are  combined,  but  the  number  varies  from  three 
to  twelve  or  more,  according  to  the  quality  of  silk  and  the 
size  of  thread  desired.  The  cocoons  which  are  to  be 
reeled  together  are  put  into  a  basin  of  hot  water,  in  order 
to  soften  the  natural  gum  with  which  the  filaments  are 
fastened  together.  The  outer  layers  of  loose,  broken 
filaments  are  removed  by  brushing  the  cocoons  with  a 
brush  of  twigs  as  they  float  in  the  hot  water.  Then  the 
ends  of  the  reelable  filaments,  one  from  each  cocoon,  are 
gathered  and  run  on  the  reel  together.  The  silk  filaments 
are  squeezed  closely  together  in  reeling  and  cohere  be- 
cause their  natural  gum  fastens  them  together.  This  is 
assisted  either  by  bringing  the  thread  back  and  twist- 
ing it  around  itself  about  two  hundred  times  in  a  seven- 
inch  spiral  before  it  passes  to  the  reel,  or  by  twisting  the 
threads  from  the  cocoons  in  two  different  basins  around 
each  other  before  they  are  passed  on  to  their  respective 
reels. 

The  best  raw  silks  are  produced  in  steam  filatures  or 
reeling  mills  operated  by  power,  but  a  number  of  Asiatic 
filatures  still  use  hand  power.  Many  years  ago,  the  reeling 
of  silk  was  entirely  a  home  industry  in  both  China  and 
Japan,  but  the  Japanese  were  quick  to  copy  European 
filatures  and  methods  of  reeling,  which  enables  them  to 
produce  raw  silks  more  regular  in  size  and  with  fewer  im- 
perfections than  can  be  reeled  by  the  native  method. 
China  also  has  a  large  number  of  steam  filatures  of  modern 
character. 

Reeling  involves  considerable  skill.  It  takes  a  girl 
many  years  to  become  expert  in  this  art,  yet  in  Italy  before 
the  war  the  reeling  girls  were  paid  only  about  thirty  cents 
a  day  at  the  most,  and  in  the  East  the  wage  scale  was 


SILK  167 

much  lower.  It  thus  becomes  evident  that  if  compensa- 
tion for  all  the  hand  labor  involved,  even  in  the  most 
modern  methods  of  raw  silk  production,  were  paid  accord- 
ing to  the  high  wage  scale  of  the  United  States,  the  price 
of  the  finished  article  would  be  raised  to  so  high  a  point 
as  greatly  to  restrict  the  market. 

In  China,  much  silk  is  still  reeled  in  the  homes  by 
primitive  appliances.  There,  even  very  young  children 
are  pressed  into  service  and  sit  for  hours,  turning  a  little 
handle,  unwinding  silk  from  the  cocoons.  Chinese 
"tsatlees"  are  reeled  by  hand  from  domesticated  cocoons, 
which  are  not  stifled.  As  the  reeling  must  be  done  very 
rapidly,  before  the  moth  emerges,  such  silks  are  neces- 
sarily very  irregular,  although  they  have  a  wonderful 
sheen  and  are  very  " nervy"  or  elastic.  It  is  necessary 
for  most  of  this  hand-reeled  silk  to  be  re-reeled  before  it  is 
suitable  for  commercial  use. 

In  Japan  the  filatures  control  the  silk  culture.  They 
distribute  the  eggs,  keep  a  general  supervision  over  meth- 
ods employed  and  purchase  the  cocoons.  In  France  and 
Italy  still  more  careful  attention  is  given  to  the  industry. 
In  France  the  raising  of  cocoons  is  carried  on  by  peasants  in 
the  southern  part  of  the  country.  Marseilles  is  the  great- 
est French  cocoon  market  and  the  second  largest  market 
for  cocoons  in  Europe,  the  first  being  Milan. 

In  addition  to  the  silk  reeled  from  cocoons  produced 
within  their  respective  countries,  Italy  and  France,  par- 
ticularly Italy,  reel  silk  from  cocoons  produced  in  other 
parts  of  Europe  and  in  the  Levant.  Italy  normally  im- 
ported about  10,000,000  pounds  of  foreign  cocoons,  and 
France  from  4,000,000  to  5,000,000.  Japan  imports  about 
2,000,000  pounds  of  cocoons,  principally  from  China. 


1 68          SOME  GREAT  COMMODITIES 

MARKETING  RAW  SILK 

Raw  silk  is  sold  in  bales  which  vary  in  weight  according 
to  the  country  in  which  the  silk  is  produced,  Japanese 
and  Shanghai  bales  weighing  133!  pounds,  Canton  bales 
io6|  pounds  and  European  bales  22o|  pounds.  The 
Asiatic  bales  are  made  up  of  books,  or  bundles  of  silk, 
each  containing  a  number  of  skeins. 

Eastern  silks  are  graded  according  to  a  somewhat  shift- 
ing classification.  There  is  no  fixed  standard  as  in  cotton 
and  wool.  Consequently,  as  the  crops  vary  from  season 
to  season,  the  higher  grades  of  one  season  may  be  no  better 
than  the  poorer  grades  of  the  next  season.  Each  filature 
usually  produces  a  number  of  grades  of  silk  which  are  sold 
under  various  "chops"  or  labels.  In  addition  to  these 
original  or  market  chops,  a  number  of  private  chops  are 
used  by  the  silk  importer  in  order  to  insure  to  his  customers 
that  under  a  certain  chop  they  shall  always  obtain  an 
unchanging  quality  of  silk.  This  could  not  be  insured 
under  the  original  chop  owing  to  the  shifting  classification. 
Unfortunately,  the  use  of  private  chops  is  sometimes 
abused  to  disguise  the  real  quality  of  silk,  and  to  dispose 
of  a  poorer  kind  under  the  label  of  a  better  grade. 

European  silks  are  more  systematically  classified  than 
are  eastern  silks.  However,  the  Japanese  Raw  Silk  Mis- 
sion during  its  visit  to  the  United  States  stated  that  a 
committee  of  fifteen  had  been  appointed  in  Japan  to  study 
the  subject  of  classification. 

CONDITIONING  SILK 

Under  normal  conditions,  water  makes  up  about  10 
per  cent,  of  the  weight  of  raw  silk,  but  at  times  the  per- 


SILK  169 

centage  is  higher.  As  silk  is  purchased  by  the  pound, 
it  is  obviously  essential  to  know  just  how  much  of  this 
weight  is  water.  To  solve  the  difficulty  the  silk  is  put 
through  a  process  called  conditioning.  This  consists 
in  determining  the  absolute  dry  weight,  to  which  is 
added  1 1  per  cent.,  the  total  being  the  conditioned  weight, 
that  is,  the  weight  it  should  be  if  in  its  normal  condition. 
Most  of  the  large  cities  of  the  world  where  much  raw  silk 
is  handled  have  conditioning  houses.  Besides  condition- 
ing, these  establishments  make  other  tests  for  various 
purposes,  such  as  ascertaining  the  boil-off,  that  is,  the  per- 
centage of  weight  lost  in  degumming  silk,  and  tests  for 
size,  tenacity,  elasticity,  etc. 

For  very  many  years  past,  European  silk  manufacturers 
have  made  a  practice  of  having  all  their  silk  conditioned, 
finding  it  far  more  economical  than  to  risk  paying  for  an 
undue  proportion  of  moisture.  The  usage  is  not  as  gen- 
eral in  the  United  States,  but  is  growing  in  an  encouraging 
manner.  In  the  year  ending  June  30, 1922,  only  6,746,000 
pounds  of  silk  were  conditioned  in  this  country  against 
27>758,ooo  pounds  in  Europe,  the  latter  total  being  ab- 
normally low  as  a  result  of  the  war. 

WASTE  SILK 

While  raw  silk  forms  the  principal  material  used  in  silk 
manufacturing,  waste  silk  is  also  an  important  factor  in 
the  industry.  Waste  silk  is  unreelable  material,  such  as 
the  coarse  and  broken  outer  layers  of  the  cocoon  and  the 
inner  layers  which  are  too  attenuated  for  reeling.  Under 
this  heading  are  also  classed  the  webby  material  produced 
by  the  worm  before  spinning  its  cocoon,  waste  made  in 
reeling,  pierced  and  otherwise  unreelable  cocoons,  and 


170          SOME  GREAT  COMMODITIES 

waste  produced  in  throwing  and  manufacturing.  This 
material,  which,  unlike  raw  silk,  is  not  in  a  continuous 
length,  must  be  made  into  spun  silk  yarn  by  a  process 
similar  to  that  used  in  the  spinning  of  cotton  and  flax. 

Waste  has  mixed  with  it,  to  a  greater  or  lesser  degree, 
a  considerable  amount  of  foreign  matter.  Chinese  silk 
waste  is  particularly  poor  in  this  respect,  owing  to  the 
fact  that  so  large  a  part  of  the  reeling  is  done  at  home  on 
the  dirt  floors.  It  is  said  that  the  poorest  grades  of  waste 
yield  only  from  25  to  30  per  cent,  of  spun  silk  compared  with 
a  yield  of  from  55  to  60  per  cent,  from  better  grades.  In 
addition  to  this  disadvantage,  the  use  of  the  poorer 
grades  of  waste,  as  well  as  of  raw  silk,  involves  a  greater 
amount  of  time  and  labor  than  is  needed  when  better 
material  is  used.  For  this  reason  American  manufac- 
turers ordinarily  find  it  necessary  to  employ  the  better 
grades  of  silk,  although  in  Europe  poorer  grades  can 
sometimes  be  used  to  advantage,  and  Japan  and  China 
even  find  it  profitable  to  utilize  silks  not  marketable  in 
other  countries. 

One  of  the  most  striking  developments  in  the  silk  busi- 
ness during  the  war  was  the  expansion  of  the  spun  silk  in- 
dustry both  in  Europe  and  in  America.  This  was  caused 
largely  by  the  war  demand  for  coarse  silk  cloth  with  which 
to  make  powder  bags  for  the  big  guns.  The  bags  are  made 
of  silk,  as  it  is  essential  to  use  a  textile  that  will  burn  up 
quickly  and  completely,  leaving  no  smouldering  rem- 
nant. Spun  silk  cloth  was  chosen  rather  than  cloth  made 
of  raw  silk,  because  of  the  comparative  cheapness  of 
the  former.  This  special  demand,  however,  has  ceased 
with  the  war,  and  such  fabrications  are  not  likely  to  be 
reproduced. 


SILK  171 

CONSUMPTION  OF  RAW  SILK  IN  THE  UNITED  STATES 

The  United  States  predominates  as  a  consumer  of  raw 
silk,  consumption  during  recent  years  having  averaged 
nearly  half  of  the  known  world  supply.  This  consumption 
is  entirely  dependent  upon  imports.  Table  B  shows  im- 
ports of  raw  silk  into  the  United  States,  by  principal  coun- 
tries of  origin,  from  1910  to  date.  Japan  is  regularly  our 
greatest  source  of  raw  silk.  Of  the  total  amount  imported 
in  1921  about  70  per  cent,  came  from  Japan,  about  20  per 
cent,  from  China,  and  less  than  10  per  cent,  from  the  rest 
of  the  world. 

TABLE  B— IMPORTS  OF  RAW  SILK  INTO  THE  UNITED  STATES  BY  PRINCIPAL 

COUNTRIES  FOR  THE  FISCAL  YEARS  FROM  1910  TO  1917  AND  THE  CALENDAR 

YEARS  1918  TO  1921 

Country  (Shaver )  1915       1916       1917       1918       1919       192°       1921 

(in  thousands  of  pounds) 

Japan..,  15,592  18,217  22,915  26,342  27,075  33,727  22,904  31,704 

China 5,134  5,097  7,420  7,007  5,751  9,099  5,932  9,587 

Italy  2,605  2,611  2,546  467  6  1,866  1,111  3,085 

France 230             50          127  36  4  50  33  686 

Other  countries. ...  238  56  63  17  29  78  293 

Total...  23,799  26,031  33,071  33,869  32,865  44,817  30,058  45,355 

Reexports 127           179         197  504  554  487  799  484 

Net  imports. ..  23,672  25,852  32,874  33,365  32,311  44,330  29,259  44,871 

Formerly,  European  silks  were  used  in  this  country 
for  the  better  grade  of  manufactured  products,  but  Japa- 
nese silks  have  improved  to  such  an  extent  that  they  may 
now  be  employed  in  any  kind  of  work.  Japan  imported 
French  and  Italian  seed,  reproduced  it  in  considerable 
quantities,  and  obtains  from  these  worms  a  yellow  silk 
which  has  greatly  facilitated  the  replacement  of  European 
silks  in  the  American  market.  Even  in  its  home  market 
the  French  reeling  industry  has  for  some  time  felt  the 
competition  of  the  more  cheaply  produced  eastern  raws 


172          SOME  GREAT  COMMODITIES 

and  Italy  is  also  somewhat  affected,  although  to  a  lesser 
degree.  Table  C  shows  the  distribution  of  Japanese  ex- 
ports of  raw  silk  from  1909  to  1913  and  from  19 19  to  1921. 

TABLE  C— EXPORTS  OF  RAW  SILK  FROM  JAPAN  BY  PRINCIPAL  COUNTRIES 
OF  DESTINATION  FROM  1909  TO  1913  AND  IN  1919,  1920  AND  1921 


Country  -"       »  1919          1920  1921 


1909-13 
(5-yr.  aver.) 

(in  thousands  of  pounds) 


United  States 14,785  36,416  19,448  32,761 

France 3,506  1,102  3,283  1,798 

Italy 2,264  25  6 

Russia 377  l  *  i 

United  Kingdom 46  209  254  71 

Other  countries 209  109  116  30 

Total 21,187  37,861  23,107  34,660 

iNot  reported  separately. 

The  Japanese  manner  of  winding  raw  silk  into  skeins 
is  well  adapted  to  American  needs.  In  making  the 
skeins,  the  raw  silk  is  crossed  in  a  diamond  shaped  forma- 
tion, known  as  Grant  reeling,  which  greatly  facilitates 
manufacturing  processes.  Some  Italian  silk  reelers  have 
not  yet  realized  fully  the  importance  of  having  their  skeins 
made  up  in  this  fashion,  and  this  has  acted  against  them 
to  some  extent  in  the  American  market. 

OTHER  CONSUMING  COUNTRIES 

Table  D  shows  the  amount  of  raw  silk  available  for 
consumption  in  the  principal  silk  manufacturing  countries 
of  the  world  from  1909  to  1913,  and  in  1919,  1920  and  1921. 
In  almost  every  instance  the  figures  shown  practically 
coincide  with  consumption.  The  term  consumption  is 
here  used  to  indicate  the  amount  of  silk  used  in  the  fac- 
tories of  each  respective  country,  regardless  of  whether  or 
not  the  finished  articles  were  consumed  within  that  coun- 
try. In  the  case  of  Japan,  although  figures  for  1919  are 


SILK  173 

probably  not  appreciably  larger  than  consumption  in  that 
year,  figures  for  1920  are  rendered  abnormally  high  by 
the  presence  of  huge  stocks  of  raw  silk  which  began  to 
accumulate  in  Yokohama  after  the  break  in  the  market 
early  in  that  year.  This  large  amount  of  26  million 
pounds,  therefore,  does  not  represent  Japanese  consump- 
tion, which  in  all  probability,  like  that  of  every  other  coun- 
try except  Belgium  and  Switzerland,  declined  in  1920  to 
a  point  below  the  level  of  1919.  It  must  not  be  over- 
looked, however,  that  the  amount  of  raw  silk  consumed  in 
Japanese  factories  has  increased  tremendously  since  pre- 
war years,  and  that  the  Japanese  silk  manufacturing  in- 
dustry has  grown  at  a  more  rapid  rate  during  that  period 
than  that  of  any  other  country. 

TABLE  D  —  RAW  SILK  AVAILABLE  FOR  CONSUMPTION  IN  PRINCIPAL  SILK 
MANUFACTURING  COUNTRIES  FROM  1909  TO  1913  AND  IN  1919, 
1920  AND  1921 


Country  (aer.)     1919  192°  1921 

(in  thousands  of  pounds) 

United  States...  22,632  44,329  29,259  44,871 

United  Kingdom  ...................  962      1,160  946  378 

France  ............................  12,684  11,210  8,832  5,493 

Italy  ..............................  4,658      3,757  3,407  2,469 

Switzerland1  .......................  1,105         853  973  655 

Belgium1  ..........................  1,090         227  1,106  76 

Japan  .............................  7,117  17,314  26,0082  12,566 

Germany1  .........................  8,713          3  2,246  2,549* 

*Net  imports.    Production  negligible  and  figures  not  available. 
^Includes  a  small  amount  of  reexported  silk. 
»Not  available. 
4Eight  months. 

In  the  United  States,  as  well  as  in  Japan,  figures  for  the 
amount  of  raw  silk  available  for  consumption  in  1920  ex- 
ceeded actual  consumption  by  a  greater  amount  than 
usual,  although  in  this  case  the  surplus  was  not  so  large. 


174         SOME  GREAT  COMMODITIES 

Chinese  raw  silk  consumption  cannot  be  determined  with 
any  exactness,  but  it  is  probable  that  it  is  second  to  that 
of  the  United  States.  It  has  been  estimated  that  in  the 
five  years  preceding  the  war  Chinese  annual  consumption 
was  about  21,000,000  pounds. 

MANUFACTURE  OF  SILK 

The  manufacture  of  silk  goods  is  divided  into  two  main 
divisions,  the  manufacture  of  silk  yarns,  and  the  manu- 
facture of  finished  silk  products  such  as  woven  fabrics, 
braids  and  silk  threads.  There  are  two  kinds  of  silk  yarns : 
spun  silk  yarns,  made  by  spinning  waste  silk,  and  thrown 
silk  yarns,  made  from  raw  silks.  As  raw  silk  threads  are 
composed  of  several  filaments  fastened  together  with  nat- 
ural gum,  they  would  become  matted  and  unworkable  if 
cleaned  and  dyed  in  that  state.  Consequently,  all  raw 
silk  that  is  to  be  skein-dyed  is  first  thrown,  or  twisted. 
Not  only  is  the  silk  twisted  in  throwing,  but  it  is  often 
doubled,  twisted,  and  combined  again  as  often  as  is  neces- 
sary for  the  special  use  to  which  it  is  to  be  put.  Thrown 
silk  yarns  are  of  three  kinds,  namely,  singles,  organzine 
and  tram.  Singles  are  the  single  raw  silk  thread,  either 
twisted  or  not;  organzine  is  a  heavier  yarn,  intended  to 
be  used  as  warp,  by  which  is  meant  the  strong  threads 
which  run  lengthwise  in  the  silk  cloth;  tram,  the  third 
kind  of  thrown  silk  yarn,  is  commonly  used  for  weft  or 
filling,  that  is,  the  threads  which  run  crosswise  in  the 
goods. 

Silk  yarns  are  ordinarily  dyed  in  the  skein  before  being 
woven  into  cloth.  The  preparatory  step  to  dyeing  thrown 
silk  yarns  is  "boiling  off,"  a  process  of  which  the  name  is 
descriptive.  This  frees  the  yarn  of  the  natural  gum  which 


SILK  175 

made  it  lustreless,  and  turns  it  out  in  skeins  of  brilliant, 
creamy  white.  The  difference  in  the  weight  which  various 
silks  lose  in  boiling  off  is  an  important  factor  to  be  con- 
sidered in  the  purchase  of  raw  silks.  It  is  said  that  the 
boil-off  of  good  Japan  silk  is  comparatively  small.  In  the 
case  of  spun  silk  yarn,  gum  is  removed  from  the  waste 
before  the  yarn  is  spun. 

If  the  silk  is  to  be  "pure  dye,"  it  is  put  through  the 
coloring  process,  and,  after  drying,  is  ready  for  the  final 
processes  of  manufacture.  Before  being  put  into  the  dye, 
however,  yarn-dyed  silk  is  usually  "weighted."  This 
means  that  it  is  dipped  into  a  liquid  solution  of  some  sub- 
stances which  the  silk  absorbs  and  retains,  thus  adding 
to  its  weight.  At  times  various  weighting  agents,  such 
as  sugar,  tannins  of  different  sorts  and  salts  of  several 
metals,  have  been  employed.  If  not  carried  to  extremes, 
weighting  does  no  injury  to  the  ultimate  consumer,  as 
it  makes  possible  the  production  of  serviceable  and  attrac- 
tive materials  at  much  lower  cost.  On  the  other  hand,  if 
weighting  is  not  skillfully  done,  or  is  overdone,  the  wearing 
qualities  of  the  silk  are  apt  to  be  very  poor.  When  goods 
are  to  be  piece-dyed,  the  gum  is  boiled  out  after  the  cloth 
is  woven.  Then  the  cloth  is  dyed,  usually  without  any 
weighting. 

Many  mills  do  not  include  the  whole  process  of  manu- 
facture in  their  work.  It  is  a  frequent  practice  for  a  mill 
to  buy  the  raw  silk,  and  to  send  it  out  to  an  independent 
throwing  firm,  to  be  thrown  on  a  commission  basis.  In 
the  same  manner,  dyeing  is  often  done  by  a  special  dyeing 
firm. 

The  character  and  extent  of  the  international  trade  in 
silk  manufactures  are  indicated  at  the  end  of  the  chapter  in 


176          SOME  GREAT  COMMODITIES 

tables  which  show  in  detail  the  exports  of  silk  products 
from  the  eight  principal  silk  manufacturing  countries, 
from  1909  to  1913  and  for  the  most  recent  year  for  which 
data  are  available. 

FRENCH  SILK  INDUSTRY 

France,  under  normal  conditions,  is  the  foremost  ex- 
porter of  manufactures  of  silk,  and  the  quality  of  French 
exports  is  very  high.  When  Germany  and  Switzerland 
began  to  flood  the  market  with  a  cheaper  grade  of  silk 
goods,  the  only  means  by  which  it  was  possible  for  French 
manufacturers  to  hold  their  supremacy  was  by  maintain- 
ing their  standard  of  excellence.  The  French  silk  industry 
is  very  closely  concentrated.  The  weaving  of  piece  goods 
is  located  principally  in  the  environs  of  Lyons,  but  the 
manufacture  of  heavy  satins  and  pile  fabrics  is  carried  on 
at  St.  Etienne,  which  city  is  also  the  centre  of  the  ribbon 
industry.  Among  the  fabrics  produced  by  French  manu- 
facturers are  many  richly  embroidered  silks,  and  brocades 
woven  with  gold  and  silver  threads.  Much  of  this  ma- 
terial finds  a  ready  sale  in  eastern  markets,  but  the  United 
States  also  is  a  large  purchaser  of  novelties  not  ordinarily 
made  in  this  country.  Because  of  the  novel  nature  of 
much  of  the  product,  the  French  silk  trade  is  particularly 
dependent  upon  fashion,  and  is  therefore  subject  to  serious 
fluctuations. 

JAPANESE  MANUFACTURES 

The  principal  silk  fabric  manufactured  in  Japan  is  the 
famous  "habutae."  The  name  "habutae"  means  "soft 
as  down."  It  is  woven  in  the  natural  gum  from  raw  silk 
which  has  not  first  been  thrown  or  dyed.  There  are  two 


SILK  177 

classes  of  habutae,  plain  and  figured,  but  the  former  is  in 
by  far  the  larger  amount.  The  Japanese  government 
has  a  system  of  inspection  of  habutae,  for  the  purpose  of 
prohibiting  the  exportation  of  any  of  this  cloth  that  is 
not  up  to  the  standard.  Low  labor  costs  enable  Japanese 
manufacturers  to  make  habutae  so  cheaply  that  they  are 
able  to  export  large  quantities  at  low  prices.  Some  of 
the  cheaper  silks  that  are  exported  from  France  are  in 
reality  Japanese  habutae,  imported  at  an  extremely  low 
price,  dyed,  printed  and  shipped  out  as  French  cloth. 
In  the  United  States  as  well,  this  material  offers  sharp 
competition  to  American  fabrics  of  the  same  grade. 

In  addition  to  the  large  amounts  of  habutae,  Japan 
produces  steadily  increasing  amounts  of  crepes,  satins  and 
a  great  variety  of  piece-dyed,  printed  and  jacquard  goods. 
Sales  of  some  of  these  materials  in  the  markets  of  the 
United  States  and  Europe  have  been  somewhat  hampered 
by  the  fact  that  colors  and  designs  were  not  well  suited  to 
western  styles.  This  difficulty,  however,  is  gradually 
being  overcome. 

Silk  yarns  have  formed  the  largest  share  of  the  product 
of  Italian  silk  factories,  and  large  quantities  are  exported 
each  year.  Fabrics  of  very  fine  quality  are  also  produced 
and  it  is  reported  that  since  the  war  the  number  of  weaving 
establishments  has  somewhat  increased. 

Chinese  production  of  manufactured  silk  goods  consists 
mainly  of  pongees,  woven  in  the  gum  from  wild  tussah 
silk.  They  are  sold  undyed,  and  are  of  the  original  tussah 
brown  which  cannot  be  bleached.  Although  little  prog- 
ress in  methods  has  been  made,  the  Chinese  skill  in  silk 
manufacturing  is  almost  as  old  as  the  discovery  of  sericul- 
ture. It  is  said  that  there  is  hardly  any  weave  used  in 


178          SOME  GREAT  COMMODITIES 

western  countries  to-day  that  was  not  known  in  Japan 
and  China  hundreds  of  years  ago. 

PRODUCTION  IN  THE  UNITED  STATES 

Exports  of  silk  goods  from  the  United  States  are  small 
as  compared  with  those  from  France,  but  the  amount  of 
silk  goods  produced  in  the  factories  of  this  country  ex- 
ceeds in  volume  the  output  of  any  other  country  in  the 
world.  Table  E  shows  the  growth  made  by  the  American 
silk  industry  since  1904.  Although  large-scale  production 
of  staple  fabrics  and  articles  is  the  leading  characteristic 
of  the  industry,  practically  every  variety  of  silk  goods  is 
produced  in  this  country,  with  the  exception  of  certain 
specialties  made  by  France  and  other  European  countries. 
Many  of  these  fancy  goods  are  made  on  the  small  looms 
that  still  exist  in  the  homes  of  French,  Swiss  and  German 
weavers,  and  the  return  for  this  work  is  very  small.  In 
the  United  States  the  manufacture  of  such  goods  at  a 
reasonable  price  would  require  the  use  of  expensive  ma- 
chinery, the  cost  of  which  would  not  be  justified  by  the 
limited  market  and  fluctuating  demand  for  the  product. 

TABLE  E— STATISTICS  OF  THE  SILK  MANUFACTURING  INDUSTRY  IN  THE 
UNITED  STATES,  1904  TO  1919 

1904  1909  1914  1919 

Number  of  establishments 624                 852                 902  1,369 

Persons  engaged  in  the  industry. ..  84,153           105,238           115,571  126,782 

Broad  looms. ..  50,252              64.836              73,504  87,215 

Ribbon  looms 9,523               10,570              11,554  9,223 

Producing  spindles 1,197,408         1,777,962         2,159,271  2,669,459 

Capital  invested $109,556,621  $152,158,002  $210,071,679  $532,732,163 

Wages  and  salaries ...                    . .  $  31,510,213  $  46,097,364  $  57,615,374  $134,597,292 

Total  value  of  production $133,288,072  $196,911,667  $254,011,257  $688,469,523 

In  1919  the  largest  number  of  silk  manufacturing  estab- 
lishments in  any  one  state  was  in  New  Jersey.  Distribu- 
tion by  states  according  to  value  of  output  was  as  follows: 


SILK  179 


Per  cent,  of 

State  total  products 

of  United  States. 

Pennsylvania 33.6 

New  Jersey 31.2 

New  York 11.9 

Connecticut 9.8 

Massachusetts 4.9 

Rhode  Island 3.9 

Other  states 4.7 

Total..  100.0 


CONSUMPTION  IN  THE  UNITED  STATES 

Of  the  $688,000,000  worth  of  silk  goods  produced  in 
the  United  States  in  1919,  97  per  cent,  was  consumed  at 
home,  and  this  is  not  an  unusual  proportion.  In  addition 
to  consuming  so  large  a  share  of  domestic  manufactures, 
the  United  States  imports  from  $25,000,000  to  $75,000,000 
worth  of  foreign  silk  products  a  year.  Table  F  shows  by 
principal  countries  of  origin,  the  value  of  manufactured 
silks  imported  into  the  United  States  from  1909  to  1921. 
Under  normal  conditions,  nearly  half  of  the  imports  of 
manufactured  silks  come  from  France.  From  Germany 
and  Switzerland  are  imported  large  quantities  of  spun  silk 

TABLE  F—  IMPORTS  OF  SILK  MANUFACTURES  INTO  THE  UNITED  STATES  BY 
PRINCIPAL  COUNTRIES  FOR  THE  FISCAL  YEARS  1910  TO  1917  AND 
CALENDAR  YEARS  1918  TO  1921 


Country               (5-y.)      1915      1916       1917       1918       1919       192°  1921 

(in  thousands  of  dollars) 

France  .........      $14,662      $11,286  $16,865  $17,240    $6,596  $13,689  $19,492  $15,517 

Germany  .......          4,392          2,654          187          i             ...              20       1,716  1,032 

Switzerland  .....          3,433          2,556      2,830      3,883      3,548      4,393      9,402  3,805 

Japan  ..........          3,211          4,908      6,760     11,569     14,698    31,813     35,359  21,213 

United  Kingdom.          2,647          1,991       3,429      3,765       1,549      2,993      4,793  2,756 

Italy  ...........             798          1,022         843       1,870          655         657       1,654  1,335 

China  ..........             247             450         896       1,765       1,098          786       1,765  1,961 

Other  countries  .             480             176          102         231          311          325       1,239  630 

Total  ......      $29,870      $25,043  $31,912  $40,323  $28,455  $54,676  $75,420  $48.249 

»Lewthan  $1,000. 


i8o          SOME  GREAT  COMMODITIES 

yarn.  From  Switzerland  we  buy  also  a  fine  gauze-like 
fabric  known  as  bolting  cloth.  It  is  made  especially 
for  use  in  flour  mills,  and  is  not  manufactured  in  this 
country. 

The  enormous  consumption  of  silk  goods  in  the  United 
States  was  greatly  stimulated  in  the  period  of  lavish  spend- 
ing that  followed  the  war.  This,  combined  with  the 
shortage  of  European  raw  silk,  was  the  principal  factor  in 
creating  a  demand  which  at  the  time  appeared  greatly  to 
exceed  world  supplies.  The  resultant  effect  upon  prices 
is  shown  in  Table  G  which  outlines  the  price  movement 
of  Italian  and  Japanese  silks  in  the  New  York  market  from 
1913  to  June,  1922. 

The  high  price  level  which  has  prevailed  in  the  raw  silk 
market  during  the  greater  part  of  the  post-war  period  has 
caused  many  people  to  study  the  possibilities  for  increasing 
world  supplies.  Japan  has  shown  what  increases  can  be 
made  with  proper  climate  and  plenty  of  cheap  labor. 
With  the  silk  industry  more  scientifically  and  systemati- 
cally organized,  there  should  be  almost  no  limit  to  the 
amount  of  raw  silk  that  China  could  give  to  the  world. 
In  England  much  is  being  written  with  regard  to  develop- 
ing the  sericultural  industry  in  India  in  order  to  fill  the 
demand  of  European  manufacturers. 

Italian  silk  production  could  be  increased  by  raising 
three  crops  a  year  in  the  southern  part  of  the  country 
instead  of  the  present  single  crop.  One  obstacle  to  silk 
raising  in  southern  Italy  is  the  lack  of  sufficient  housing 
space  for  the  worms,  Italian  peasant  quarters  being  as  a 
rule  very  small  and  congested.  This  could  be  overcome, 
however,  by  the  construction  of  cheap  sheds  capable  of 
being  heated. 


SILK  181 


TABLE  G — TREND  OF  RAW  SILK  PRICES  IN  THE  NEW  YORK  MARKET  IN 

1913  AND  FROM  1919  TO  JUNE,  1922 

(Prices  are  for  date  nearest  the  fifteenth  of  the  month) 

Year  and  month  JSS'  $3=  JSe 

Classical  Shinshiu  Best  No.  1 
(dollars  per  pound) 

1913 

January $3.80  $3.50  $4.10 

April 3.92  3.53  4.20 

July 4.30  3.63  4.45 

October 4.60  3.95  4.80 

1919 

January »  6.45  7.35 

April *  6.45  7.05 

July i  9.60  10.10 

October 11.20  10.25  11.35 

1920 

January 15.45  16.25  16.20 

April 13.05  11.70  13.75 

July 8.30  6.50  8.25 

October 7.40  6.40  7.60 

1921 

January 5.75  5.85  6.05 

February 5.80  5.60  6.20 

March 5.90  5.75  6.20 

April 6.75  6.05  6.70 

May 6.25  5.35  6.45 

June 6.00  6.00  6.55 

July 6.15  5.90  6.65 

August 6.20  5.69  6.35 

September  6.30  5.87  6.60 

October 6.70  6.05  6.90 

November 6.90  6.50  7.00 

December 8.00  7.50  8.00 

1922 

January 8.30  7.90  8.40 

February 8.05  6.65  7.80 

March 7.30  6.30  7.50 

April 7.15  6.25  7.25 

May 7.90  7.00  7.95 

June.. 8.50  7.35  8.20 

^Nominal. 


182 


SOME  GREAT  COMMODITIES 


Because  of  large  stocks  and  lack  of  demand,  the  ten- 
dency during  1921  was  to  decrease  silk  production.  In 
Japan,  particularly,  an  attempt  was  made  to  decrease 
output.  Italian  raw  silks  were  not  so  much  affected,  be- 
cause the  position  of  exchange  made  it  possible  to  sell 
Italian  silks  in  the  United  States  at  a  point  below  the 
price  level  of  eastern  raws.  With  improvement  in  1922 
consumption  has  increased.  It  is  an  undeniable  fact  that 
silk  has  become  a  necessary  commodity,  and  one  for  which 
in  normal  times  there  will  continue  to  be  a  steady  de- 
mand. 


EXPORTS  OF  MANUFACTURED  SILKS  FROM  PRINCIPAL  SILK-MANUFACTURING 

COUNTRIES 


Quantity 

w 


Value 


I.  UNITED  STATES 


Dress  goods 
Wearing  apparel 
All  other  manufactures 
Total.  .  . 


(thousands  of  yards)     (thousands  of  dollars) 


3,077  (c)  3,338 

(c)  (c)  3,612 

(c)  (c)  2,722 

(c)  1,574  9,672 


(a)  Fiscal  years  ending  June  30. 

(b)  Calendar  year. 

(c)  Not  available. 


II.  FRANCE 

Thrown  silk  yarn 

Spun  silk  yarn 

Silk  thread  and  embroidery  silk. . . 

Fabrics  of  silk  or  waste  silk 

Gauze  or  cr§pe  of  silk 

Silk  tulle 

Velvet  and  plush 

Fabrics  of  waste  silk  for  upholster- 
ing  

Silk  muslin,  grenadine,  etc 

Knit  goods 

Passementerie 

Embroideries  on  silk  background. . 

Laces  of  silk  or  waste  silk 

Ribbons  of  silk  or  waste  silk 

Silk  fabrics  with  gold  or  silver 
thread. . . 


1909-1913 

Average 
(thousands 

2,879 
2,269 

53 
5,616 

11 

78 

54 

3 

18 

123 

196 

5 

431 
1,504 

3,653 


1921 


of  Ibs.) 

1,175 

1,569 

175 

5,064 

114 

415 

241 

55 

33 

325 

1,173 

39 

169 

1,708 

3,262 


1909-1913 
Average 
(thousands  of  francs) 

49,986  78,649 
56,388 
10,416 
595,686 
11,937 
43,271 


15,821 

1,044 

178,394 

525 

4,064 

1,830 

84 

720 

7,561 

3,344 

628 

19,912 

48,333 


23,525 

5,274 
2.913 

35,076 
51,893 
32,740 
25,964 
219,859 


56,685   295,907 


SILK 

1909-1913        ,™, 

183 

1909-1913           iqoi 

A 

Lverage 

Average 

III.  BELGIUM 

(thousands  of  Ibs.) 

(thousands  of  francs) 

Silk  yarns  

3,381         2,883 

26,519           50,365 

Thread  and  embroidery  yarn  

(a)               404 

(a)             7,292 

3                5 

32                285 

Tulles,  laces  and  blonds  

4                1 

368                214 

Knit  goods  

(b)                18 

12                712 

Other  silk  fabrics  

28            122 

341             5,060 

(a)  Not  available. 

(b)  Less  than  1,000  Ibs. 

1909-1913         100t 

1909-1913        1Q21 

Average 

Average 

IV.  ITALY 

(thousands  of  Ibs.) 

(thousands  of  lire) 

Thrown  silk  yarn  

7,786            5,981 

177,678       916,750 

Spun  silk  yarn  

2,469            1,353 
80                 99 

25,888          73,738 
1,773            6,616 

Fabrics  of  silk  or  silk  waste  

3,047            2,419 

81,476        299,798 

Velvet  and  plush  

7                 26 

303           3,020 

Knit  goods  

1                 14 

23            2,188 

Tulles  and  laces  

3               394 

170         64,699 

Trimming  and  buttons  

41                 83 

795           5,491 

Fabrics  of   silk  containing  metal 

threads  

3                 11 

197           2,125 

Sewn  articles  

184                139 

11,969         26,772 

Galloons  and  ribbons  

226               105 

5,745           8,469 

(a)  Less  than  1,000  Ibs. 

1909-1913         1Q01 

1909-1913         1Q01 

Average 

Average 

V.  SWITZERLAND 

(thousands  of  Ibs.) 

(thousands  of  francs) 

Thrown  silk  yarn  

2,588               750 

58,017         28,841 

Spun  silk  yarn  

2,697             1,698 

28,146         29,039 

Silk  thread  and  embroidery  silk.  .  . 

218               178 

3,302            5,496 

Bolting  cloth  

69                 65 

5,078          10,299 

Other  articles  of  silk,  waste  silk  and 

artificial  silk,  in  the  piece  
Fabrics  of  silk,  waste  silk  and  arti- 

4,495            3,390 

103,396       170,152 

ficial  silk,  cut  up  and  hemmed.  .  . 

93                 17 

2,347              968 

Ribbons  

1,488            1,078 

41,217         59,862 

Passementerie  

4                   4 

96                99 

Embroideries  

73                   7 

4,687           1,044 

Laces  

(a)                (a) 

35                 18 

Table  covers  and  bedspreads  

1 

6 

(a)  Less  than  1,000  Ibs. 

1909-1913          1Qon 
Average 

1909-1913        1Q5« 
Average          192° 

VI.  GERMANY 

(thousands  of  Ibs) 

(thousands  of  marks) 

Thrown  silk  yarn  
Spun  silk  yarn  
Thread  

1,387 
1,114               181 
572               266 

19,872 
6,781          54,080 
5,957        121,305 

Silk,  waste   silk   or  artificial    silk 

combined  with  metal  threads  .  .  . 

35 

292 

Upholstery  fabrics  
Fabrics  of  velvet  and  plush  of  silk  . 
Fabrics  of  silk  

85                  18 
\&\         2.077 

1,544           7,815 
16,745  )     OC1  C01 
67!l30(     »WM 

Ribbons  

2,068               909 

25,156       390,944 

Tulle  
Bolting  cloth  
Gauze,  crepe  and  similar  fabrics  of 
silk  

m 

'i             68 

52) 

257'j 
57  1     34,408 
659J 

Knitted  silk  

525               552 

8,036        222,895 

Lace  &  lace  goods  of  silk  
Embroideries  on  silk  

%\              *> 

3,875  )       ,0  77A 
3,297  £      42'774 

Silk  trimmings,  buttons,  etc  

11,957            2,377 

60,491       305,276 

184 


SOME  GREAT  COMMODITIES 


VII .  UNITED  KINGDOM 


1909-1913  .q?1          1909-1913 

Average  Average 

(thousands  of  Ibs.)  (thousands  of  £  sterling) 


1921 


Thrown  silk  yarn  

65 

(a) 

55 

1 

Spun  silk  yarn  

1,217 

235 

403 

279 

Broadstuffs  entirely  of  silk(b)  

4,661 

1,515 

455 

459 

Broadstuffs  silk  combined  with 

other  materials(b)  

6,783 

1,733 

724 

754 

Laces,  entirely  of  silk  

(c) 

(c) 

79 

69 

Laces,  silk  combined  with  other 

materials  

(c) 

(c) 

13 

23 

Ribbons,  entirely  of  silk  

(c) 

(c) 

15 

59 

Ribbons,  silk  combined  with 

other  materials  

(c) 

(c) 

13 

17 

(c) 

(c) 

426 

623 

(a)  Less  than  1,000  pounds. 

(b)  Thousands  of  yards. 

(c)  Not  available. 

1909-1913 
Average 

1921 

1909-1913 
Average 

1921 

VIII.  JAPAN 

(thousands  of  units) 

(thousands  of  yen) 

Spun  silk  yarn  (Ibs.)  

419 

271 

1,280 

2,091 

Silk  piece  goods;  habutae  (Ibs.)  .  . 

3,070 

2,701 

29,388 

43,558 

Kaiki,    including    cotton    mixture 

(yds.)  

774 

65 

269 

76 

Satins  (yds.)  

2.236 

7,291 

1,107 

7,138 

Taffetas  (yds.)  

1,353 

655 

917 

758 

Chiffon  (yds.)  

1,030  (a) 

229 

411 

157 

Silk  and  cotton  pongee  (yds.)  .  .  . 
Crgpes  (yds.)  

(b) 
377 

27,134 
6,731 

(b) 
563 

23,802 
10,709 

All  other  silk  piece  goods  (pieces)  .  . 

95 

(b) 

630 

3,739 

Silk  handkerchiefs  (doz.)  

1,481 

961 

4,551 

3,186 

Silk  nightgowns  (no.)  
Silk  shawls  (no.)  

158 
393 
5 

35 

*> 

746 
252 
114 

240 
(b) 
368 

(a)  Two-year  average. 

(b)  Not  available. 

SUGAR 

SOMEWHAT  more  than  a  thousand  years  ago  the 
western  world  learned  from  the  East  the  use  of 
crystallized  substances  from  the  juice  of  sugar 
cane  and  the  era  of  the  Crusades  marked  the  beginning 
of  trade  in  sugar  between  Europe  and  the  Levant.  Hun- 
dreds of  years  later  the  need  for  a  substitute  for  cane  sugar 
led  to  the  production  of  sugar  from  the  juice  of  beet  roots. 
Except  for  a  few  sweetening  substances  such  as  honey, 
the  West  subsisted  without  sugar  until  medieval  times,  yet 
to-day  more  than  16,000,000  tons  of  sugar  are  distributed 
annually  in  the  world's  markets,  and  sugar  has  become 
one  of  the  most  valuable  of  foods. 

Practically  all  the  sugar  produced  is  used  for  food,  either 
directly  or  in  manufactured  food  products.  In  the  United 
States  per  capita  consumption  averages  about  85  pounds 
of  sugar  a  year,  and  before  the  war  British  consumption 
was  somewhat  above  this  figure.  In  Australia  the  rate 
of  consumption  is  more  than  100  pounds  a  year.  Per 
capita  consumption  of  sugar  is  far  smaller,  however,  in 
most  European  countries  and  in  some  parts  of  the  world 
little  or  none  is  used. 

The  dry,  white  granulated  sugar  of  to-day  is  far  removed 
from  the  dark,  moist  mass  or  the  hard  loaf  which  formerly 
were  in  everyday  use.  War  conditions  brought  home  the 
fact  that  sugars  vary  greatly  in  appearance  and  quality. 
Coarse  yellowish  sugars  from  Java  and  other  countries  were 

185 


186          SOME  GREAT  COMMODITIES 

an  unwelcome  substitute  for  the  perfect  product  to  which 
American  consumers  had  been  accustomed.  The  purity 
and  uniformity  of  white  granulated  sugar  are  the  result 
of  years  of  experiment  and  scientific  development.  Chem- 
ically, sugars  are  carbohydrates,  combinations  of  carbon, 
hydrogen  and  oxygen.  Cane  and  beet  sugars  when  fully 
refined  are  pure  sucrose,  differing  in  composition  from 
glucose  and  other  forms  of  sugar  found  in  plants.  From 
a  dietary  standpoint  refined  sugar  is  a  highly  concentrated 
food,  containing  practically  no  waste  and  consisting  ex- 
clusively of  energy-producing  elements. 

CANE  AND  BEET  SUGAR 

Sugar  cane  is  believed  to  have  originated  in  India  or 
some  other  part  of  eastern  tropical  Asia.  Knowledge  of 
the  cane  plant  was  acquired  from  India  by  the  Chinese, 
as  is  shown  in  Chinese  writings  of  the  eighth  century  B.  C. 
Solid  sugar  was  first  known  in  the  East  about  600  A.  D., 
so  far  as  historical  records  show.  The  Arabs  probably 
were  responsible  for  the  introduction  of  cane  culture  into 
Egypt  and  from  there  into  Spain.  However,  it  was  not 
until  after  the  return  of  the  Crusaders  from  Palestine, 
where  they  found  cane  plantations,  that  trade  in  sugar 
began  to  spread  throughout  western  Europe.  Cane  cul- 
ture was  introduced  into  the  West  Indies  from  Europe 
soon  after  the  discovery  of  the  New  World. 

After  centuries  of  cultivation,  cane  remains  a  tropical 
plant,  which  is  grown  commercially  no  farther  north  than 
Georgia  or  southern  Spain.  Sugar  beets  are  as  dis- 
tinctively natives  of  the  temperate  zone,  thriving  best 
in  western  Europe  and  in  the  North  American  continent. 
The  United  States,  Spain  and  Australia  produce  both 


SUGAR  187 

sugar  cane  and  beets,  but  only  under  widely  different  con- 
ditions. The  value  of  rich  tropical  lands  for  the  growing 
of  sugar  cane  and  other  agricultural  products  made  them 
eagerly  sought  by  European  powers  in  the  period  of  colo- 
nial expansion;  yet  after  rival  nations  had  secured  them- 
selves in  the  possession  of  East  and  West  Indies,  France 
under  Napoleon  created  the  beet  sugar  industry  on  Euro- 
pean soil  in  an  effort  to  become  independent  of  foreign 
supplies.  From  France  and  Germany  beet  culture  spread 
eastward  to  Russia,  southward  to  Italy,  and  northward  to 
the  Scandinavian  countries. 

Although  beet  sugar  has  so  recently  entered  the  field  it 
has  proved  a  vigorous  rival  of  cane  sugar.  The  race 
between  the  luxuriant,  self-renewing  cane  of  the  tropics 
and  the  carefully  cultivated  beet  of  the  temperate  zone 
has  been  an  interesting  contest  in  the  past  80  years.  The 
leading  place  was  first  won  by  beet  sugar  in  the  season 
1882-83.  Occasionally  after  this  cane  sugar  production 
forged  ahead  but  did  not  hold  the  lead.  The  chief  Euro- 
pean governments  used  bounties,  drawbacks  on  exports 
and  other  measures  to  encourage  production  of  beet  sugar, 
which  thus  was  enabled  to  supersede  cane  sugar  in  the 
British  market.  The  effect  on  the  West  Indian  industry 
was  disastrous.  Finally  the  principal  western  European 
governments  agreed,  under  the  terms  of  the  Brussels  Con- 
vention of  1902,  to  do  away  with  artificial  aid  to  beet 
production.  Cane  sugar  soon  took  the  lead.  Cane  pro- 
duction in  1900-01  was  2,850,000  tons;  by  1910-11  it  had 
increased  to  8,433,000  tons.  The  war  disrupted  beet 
sugar  production  so  that  its  output  fell  from  8,635,000  tons 
in  1913-14  to  3,255,000  tons  in  1919-20.  At  the  same 
time  expansion  in  the  cane  sugar  industry  brought  the 


i88 


SOME  GREAT  COMMODITIES 


crop  to  1 1,914,000  tons  in  1919-20.  As  normal  production 
in  Europe  is  restored  the  contest  will  again  be  active. 
Total  sugar  crops  of  the  world  at  lo-year  intervals  from 
1840  to  1910  and  annually  thereafter  are  shown  in  table  A. 
The  proportion  of  cane  and  beet  sugar  is  also  shown. 

TABLE  A— SUGAR  CROPS  OF  THE  WORLD  AND  PERCENTAGE  OF  CANE  AND 
BEET,  1840  TO  1922 

Percentage  of  total 
Cane          Beet 

96  4 

86  14 

80  20 

66  34 

54  46 
41  59 
32  68 

50  50 
57  43 

51  49 
53  47 

55  45 
63  37 
66  34 

71  29 
76  24 
79  21 

72  28 
71  29 

"Estimate  of  production  in  British  India  is  included  in  1910-11  and  later  years. 
'Estimate  near  close  of  harvesting  season. 


Year 

Total  crop 

Cane 

Beet 

(in  gross  tons) 

1840  

1,150,000 

1,100,000 

50,000 

1850  

1,400,000 

1,200,000 

200,000 

1860  

1,899,000 

1,510,000 

389,000 

1870  

2,416,000 

1,585,000 

831,000 

1880-S1  

3,659,000 

1,911,000 

1,748,000 

1890-91  

6,265,000 

2,555,000 

3,710,000 

1900-01  

8,800,000 

2,850,000 

5,950,000 

1910-11  

.  .  .     116,994,000 

18,433,000 

8,561,000 

1911-12  

.  .  .      16,064,000 

9,175,000 

6,889,000 

1912-13  

.  .  .      18,209,000 

9,290,000 

8,919,000 

1913-14  

18,436,000 

9,801,000 

8,635,000 

1914-15  

.  .  .      18,483,000 

10,177,000 

8,306,000 

1915-16  

.  .  .      16,882,000 

10,627,000 

6,255,000 

1916-17  

.  .  .      17,105,000 

11,332,000 

5,773,000 

1917-18  

17,415,000 

12,408,000 

5,007,000 

1918-19  

.  .  .      15,841,000 

11,960,000 

3,881,000 

1919-20  

.  .  .      15,169,000 

11,914,000 

3,255,000 

1920-21  

.  .  .      16,682,000 

12,006,000 

4,676,000 

1921-22  

.  .  .     217,423,000 

212,446,000 

24,977,000 

THE  WORLD  S  SUGAR  PRODUCTION 

Maximum  production  of  sugar  was  reached  in  1914-15 
when  the  world's  crop,  cane  and  beet  combined,  was 
18,483,000  tons.  Sharp  curtailment  in  the  European  out- 
put of  beet  sugar  during  and  after  the  war  reduced  the 
total  to  15,169,000  tons  in  1919-20.  Since  that  year  the 
trend  has  been  upward.  Prompt  recovery  from  depres- 
sion has  been  a  characteristic  of  the  sugar  crop. 


SUGAR  189 

The  limit  of  the  world's  output  has  not  been  approached. 
More  sugar  may  be  grown  by  putting  additional  land 
under  cane  or  by  increasing  the  yield  per  acre.  Cuba  and 
the  Philippines,  for  example,  can  extend  their  cane  fields. 
British  India  now  produces  about  one  ton  of  sugar  to  the 
acre,  but  by  the  use  of  improved  methods,  output  can 
readily  be  raised  to  two  or  three  tons.  In  the  United 
States,  Canada  and  elsewhere  larger  areas  can  be  devoted 
to  beet  culture,  whenever  the  price  of  sugar  makes  it 
profitable  in  competition  with  other  crops.  Supply  can 
thus  be  increased  whenever  there  is  enlarged  demand  from 
consumers  who  are  able  to  buy  sugar. 

Labor  shortage  threatens  to  become  a  limiting  factor  in 
some  localities  but  as  an  offset  there  is  the  possibility  of 
more  widespread  use  of  machinery.  Cane  cutting  and 
cultivation  of  beet  fields  still  require  considerable  hand 
labor,  while  machinery  has  been  applied  to  most  of  the 
later  processes.  Mechanical  cane  cutting  seems  not  im- 
possible as  a  number  of  machines  have  been  designed  for 
that  purpose,  some  of  which  may  eventually  prove  prac- 
ticable. 

CANE  SUGAR  PRODUCTION  IN  CUBA 

Cuba  is  the  leading  producer  and  exporter  of  sugar. 
After  the  liberation  of  the  island  in  1898,  this  industry, 
which  is  by  far  the  largest  in  Cuba,  was  greatly  stimulated. 
The  maximum  crop  under  Spanish  rule  was  1,000,000  tons 
(1894)  but  by  I9I°  tnis  figure  was  almost  doubled  and  in 
1921-22  the  record  crop  of  3,996,000  tons  was  made. 
Cuban  crops  in  1913-14  and  from  1918-19  to  1921-22  are 
shown  with  those  of  other  countries  in  table  B  on  page  196. 
The  area  of  land  suitable  for  cane  which  was  controlled 


190          SOME  GREAT  COMMODITIES 

by  producers  in  1920  was  estimated  at  over  4,000,000 
acres  or  about  one-seventh  of  the  area  of  the  island.  More 
than  half  of  this  acreage  is  controlled  by  the  "centrals," 
factories  which  as  a  rule  are  owned  by  large  corporations. 
The  central  usually  grinds  not  only  the  cane  produced 
on  its  own  lands  but  also  some  cane  purchased  from 
near-by  "colonos"  who  own  estates  or  farms.  Of  the 
entire  investment  in  the  Cuban  sugar  industry,  estimated 
at  over  $950,000,000  in  the  fall  of  1921,  two-thirds  are 
believed  to  be  American  capital. 

Cuba  has  almost  ideal  conditions  for  cane  cultivation: 
a  warm  climate,  plenty  of  moisture,  and  rich  soil,  much  of 
which  is  underlaid  with  limestone.  Future  development 
of  the  industry  will  probably  be  greater  in  the  east,  where 
the  land  has  not  been  cropped  for  so  long  a  time  and  more 
virgin  soil  is  still  available,  than  in  the  west.  The  yield 
per  acre  is  somewhat  higher  in  the  east  and  production 
costs  consequently  lower.  Native  labor  is  supplemented 
in  times  of  high  wages  by  immigration  from  Spain  and 
from  near-by  islands. 

The  cane  plant  belongs  to  the  grass  family  and  grows 
from  8  to  24  feet  in  height.  There  are  several  varieties, 
but  much  remains  to  be  done  in  the  development  of  new 
strains.  New  cane  is  grown  from  sections  of  stalk  which 
are  planted  in  the  spring  or  fall  and  cutting  begins  nine 
months  or  more  after  planting.  Old  roots  continue  to 
produce  new  but  less  abundant  growth,  called  ratoon 
crops.  In  Cuba  it  is  often  profitable  to  allow  the  cane  to 
ratoon  for  ten  years.  Only  simple  cultivation  and  a 
moderate  use  of  fertilizers  are  required.  Cuban  agricul- 
tural methods  are  not  intensive,  but  they  have  proved 
adequate  under  present  conditions.  Fifteen  or  twenty 


SUGAR  191 

tons  of  cane  to  the  acre  is  an  average  yield,  from  which 
somewhat  more  than  two  tons  of  sugar  are  made.  Grind- 
ing begins  late  in  November  and  the  greater  part  is  com- 
pleted in  June. 

Mechanical  methods  of  handling  cane  and  making  sugar 
are  highly  developed  in  Cuba  and  are  typical  of  progressive 
methods  used  in  other  cane-growing  countries.  Freshly 
cut  cane  is  hauled  immediately  to  the  central  where  it  is 
fed  to  the  crusher  which  breaks  and  flattens  the  stalks. 
It  then  enters  the  mill  and  is  passed  between  heavy  rollers 
to  force  out  the  juice.  From  12  to  16  per  cent,  of  the 
weight  of  the  cane  consists  of  sugar,  most  of  which  can  be 
extracted,  although  the  maximum  sugar  content  may  be 
higher.  The  richness  of  the  juice  varies  under  different 
conditions  of  growth  and  maturity. 

Cane  juice,  after  having  been  heated,  settled,  and  filtered, 
is  boiled  first  in  multiple  evaporators,  then  in  vacuum 
pans  in  which  it  is  almost  completely  crystallized.  Most 
of  the  mother  liquor  or  molasses  remaining  thereafter  is 
driven  off  in  centrifugal  machines  revolving  at  high  speed. 
Frequently  the  crystals  are  subjected  to  steam  treatment 
for  additional  drying.  The  product  is  a  hard-grained, 
yellowish-brown  raw  sugar,  practically  dry  and  possessing 
good  keeping  qualities,  which  is  sold  as  96°  centrifugal  on 
the  basis  of  a  pure  sucrose  content  of  96  per  cent. 

The  natural  market  for  Cuban  raw  sugar  is  the  United 
States  and  refineries  from  Boston  to  Galveston  use  this 
grade.  Under  the  reciprocity  treaty  between  the  two 
countries,  the  United  States  grants  a  reduction  of  20  per 
cent,  of  the  duty  on  all  imports  from  Cuba.  The  United 
Kingdom  became  a  large  buyer  of  Cuban  sugar  during 
the  war,  when  European  beet  sugar  was  cut  off.  British 


i92          SOME  GREAT  COMMODITIES 

imports  from  Cuba  in  1918  increased  almost  fourfold  over 
1913,  but  after  the  war  this  trade  declined,  leaving  Cuba 
with  greatly  increased  crops  for  which  purchasers  were 
needed.  Wartime  prosperity  had  led  to  heavy  invest- 
ments in  new  and  costly  installations  at  centrals.  The 
close  of  1921  found  Cuba  in  a  serious  financial  condition 
with  abnormally  large  stocks  of  sugar,  almost  one-third 
of  the  year's  crop. 

The  problem  of  the  surplus  at  the  close  of  1921  was 
largely  solved  by  a  tremendous  buying  movement  in  the 
United  States  and  unusual  European  purchases  in  the 
first  half  of  1922.  But  the  Cuban  industry  has  demon- 
strated its  ability  to  increase  production  at  a  more  rapid 
rate  than  the  normal  increase  of  American  consumption. 
It  may  eventually  become  necessary  for  Cuba  to  dispose 
of  an  increasing  proportion  of  its  product  outside  of  the 
United  States.  As  continental  beet-growing  countries 
will,  in  all  probability,  again  supply  their  own  needs  with 
a  surplus  for  export,  Europe  is  only  an  uncertain  market 
for  Cuban  sugar.  The  Orient  has  been  suggested  as  an 
outlet,  but  in  this  connection  a  potential  increase  in  pro- 
duction in  the  tropical  areas  of  Asia,  the  Philippines,  and 
the  Malay  Archipelago  is  not  to  be  disregarded. 

OTHER  CANE  SUGAR  PRODUCING  COUNTRIES 

British  India  falls  far  short  of  its  potential  importance 
as  a  sugar  producer.  With  nearly  3,000,000  acres  under 
cane  (1920-21)  the  country  does  not  supply  all  of  its 
domestic  demand  and  regularly  imports  additional  sugar, 
mostly  from  Java  and  Mauritius.  The  sugar  crop  of 
2,500,000  tons  or  more  represents  less  than  the  entire  cane 
production,  as  some  cane  is  used  directly  for  chewing  and 


SUGAR  193 

other  purposes.  While  information  on  the  Indian  crop 
is  inexact  owing  to  the  non-commercial  character  of  much 
of  the  production,  the  yield  is  known  to  be  conspicuously 
low,  averaging  just  over  one  ton  of  sugar  to  the  acre.  The 
bulk  of  the  output  is  a  crude  raw  sugar  called  "gur"  which 
satisfies  the  native  population.  Efforts  are  under  way  to 
improve  the  methods  of  cultivation  and  increase  output. 

A  remarkable  state  of  development  has  been  reached  in 
the  cane  sugar  industry  of  Java.  The  Dutch  government 
and  the  producers  themselves  have  thoroughly  utilized 
scientific  methods  of  culture  and  extraction,  with  brilliant 
results.  Abundant  and  cheap  labor  has  also  been  an 
important  factor  in  success.  A  crop  averaging  about 
1,500,000  tons  is  produced  and  Java  is  the  second  largest 
exporter  in  the  world.  "Java  white,"  the  characteristic 
product  of  the  industry,  is  an  incompletely  refined  sugar 
especially  adapted  to  the  market  in  British  India,  where 
religious  prejudice  exists  against  sugars  refined  with  animal 
charcoal.  Other  grades  made  in  Java  are  "browns"  and 
muscovado  (raw  sugar  of  a  lower  grade  than  centrifugal). 
British  India,  Japan  and  China  take  the  bulk  of  Java's 
exports,  but  in  times  of  high  prices,  as  in  1920,  exports  to 
Europe  and  America  are  increased  at  the  expense  of  the 
Orient. 

Cane  is  grown  in  many  sections  of  the  world  other  than 
those  mentioned,  but  on  the  basis  of  a  total  cane  sugar 
production  of  about  12,000,000  tons  a  year  the  crops  of 
Cuba,  India  and  Java,  amounting  to  about  3,900,000  tons, 
2,500,000  tons  and  1,500,000  tons  respectively,  constitute 
nearly  two-thirds  of  the  world's  supply.  Hawaii  furnishes 
the  largest  item  of  the  remainder,  with  Porto  Rico  and 
Japan  (including  Formosa)  as  close  competitors.  Several 


194          SOME  GREAT  COMMODITIES 

other  regions,  including  Peru,  Brazil,  the  Philippines, 
Mauritius,  Argentina,  Australia  and  Louisiana  produce 
considerable  quantities.  Most  of  the  larger  islands  of 
the  West  Indies  grow  enough  cane  to  export  at  least  a 
small  quantity  of  sugar  and  in  some  cases  the  manufacture 
of  molasses  and  Jamaica  rum  adds  to  the  profits  of  the 
sugar  industry. 

The  Hawaiian  Islands  merit  special  attention  as  the 
most  advanced  development  of  the  cane  sugar  industry. 
The  highest  yield  per  acre  in  the  world  is  achieved  there 
through  the  aid  of  natural  resources,  scientific  knowledge 
and  organization.  In  recent  years  the  production  of  the 
islands  has  averaged  4.3  tons  of  sugar  to  the  acre  while 
individual  plantations  sometimes  produce  almost  12  tons 
to  the  acre.  The  cane  is  said  to  excel  that  of  any  other 
country  in  quality.  But  Hawaii  can  put  little  if  any  new 
land  into  cultivation  and  will  have  much  to  fear  from  the 
competition  of  countries  where  land  is  cheaper  and  wages 
lower.  Under  the  favorable  influence  of  the  reciprocity 
treaty  of  1876  with  the  United  States,  Hawaiian  produc- 
tion made  notable  gains,  reaching  200,000  tons  just  before 
annexation  by  the  United  States  in  1898.  The  record 
crop  was  that  of  1914-15,  577,000  tons.  Free  admission 
of  Hawaiian  sugar  into  the  United  States  insures  a  market 
with  preference  over  all  foreign  sugar,  including  Cuban. 

The  Philippines  are  still  far  from  full  development  of 
their  sugar  industry,  and  exports  remain  about  the  same 
as  under  the  Spanish  regime.  Modern  factories  and 
equipment  have  been  installed  so  that  centrifugal  raw 
sugar  now  predominates  over  muscovado.  Exports  are 
divided  between  the  Far  East  and  the  United  States.  In 
Porto  Rico  most  of  the  sugar  is  produced  at  centrals  with 


SUGAR  195 

modern  methods  and  machinery.  Since  the  island  became 
an  American  possession,  production  has  risen  from  an 
average  of  less  than  100,000  tons  (1900-05)  to  over 
400,000  tons,  marketed  exclusively  in  the  United  States. 
Philippine  and  Porto  Rican  sugars  are  free  of  duty. 

Louisiana  has  produced  cane  sugar  since  the  French 
colonial  period,  before  1800,  and  Texas  produces  a  small 
crop.  The  quantity  in  the  two  States  is  not  large  enough 
to  affect  the  world  market.  Although  soil  and  rainfall  are 
suited  to  cane  culture,  the  growing  season  is  sometimes 
shortened  by  frosts,  and  low  yield  per  acre  and  high  labor 
costs  increase  the  cost  of  production.  The  crop  averages 
about  200,000  tons  a  year,  which  is  refined  and  used  in 
the  United  States.  Crops  of  over  300,000  tons  are  occa- 
sionally made,  as  in  1911-12  and  earlier,  but  on  the  show- 
ing of  the  last  ten  years,  Louisiana  sugar  production  is  a 
declining  industry. 

Refining  generally  forms  a  separate  branch  of  the  cane 
sugar  industry  and  is  carried  on  in  countries  where  the 
market  for  refined  sugar  exists.  Eastern  refineries  of  the 
United  States  use  chiefly  Cuban  raws,  filling  in  with  Porto 
Rican,  Philippine,  and  other  grades,  while  San  Francisco 
handles  principally  Hawaiian  sugars.  The  British  re- 
fineries draw  their  raw  cane  sugar  from  all  quarters  of  the 
world — Cuba,  Mauritius,  the  British  West  Indies,  South 
America  and  Java.  Filtering  through  charcoal  to  re- 
move coloring  matter  is  an  essential  part  of  the  refining 
process.  Raw  sugar  yields  slightly  less  than  an  equal 
weight  of  refined  owing  to  the  removal  of  molasses  and 
impurities. 

Table  B  shows  cane  and  beet  sugar  production  by  lead- 
ing countries  for  1913-14  and  from  1918-19  to  1921-22. 


196 


SOME  GREAT  COMMODITIES 


TABLE  B— SUGAR  CROPS  OF  PRINCIPAL  PRODUCING  COUNTRIES 


Country 

Cane  Sugar — 
United  States: 

Louisiana 

Texas 

Porto  Rico 

Hawaiian  Islands 

Virgin  Islands  of  the  U.  S. 

Cuba 

British  West  Indies 

French  West  Indies 

San  Domingo  and  Haiti . . 
Mexico      and      Central 

America 

Argentina 

Brazil 

Peru 

Other  South  America .... 

British  India 

Java 

Formosa  and  Japan 

Philippine  Islands 

Australia 

Fiji  Islands 

Mauritius 

Natal,  Egypt,  and  other 

Africa2 

Spain 

Total  Cane  Sugar . . . 

Beet  Sugar- 
Germany 

Austria  and  Hungary .... 

Czechoslovakia 

Russia  and  Ukraine 

Poland 

France 

Italy 

Spain 

Belgium 

Netherlands 

Other  Europe 

United  States 

Canada 

Total  Beet  Sugar 

Grand  Total,  Cane  and  Beet 


1913-14     1918-19     1919-20     1920-21     1921-221 
(in  thousands  of  gross  tons) 


261 

251 

108 

151 

290 

7 

4 

6 

3 

325 

363 

434 

439 

385 

551 

539 

496 

508 

490 

6 

9 

12 

5 

5 

2,598 

3,972 

3,730 

3,936 

3,996 

136 

197 

191 

143 

158 

66 

37 

42 

52 

59 

106 

162 

180 

191 

237 

150 

98 

127 

153 

157 

280 

130 

299 

202 

175 

158 

183 

177 

340 

325 

228 

294 

330 

350 

325 

129 

140 

118 

130 

123 

2,292 

2,370 

3,049 

2,448 

2,500 

1,272 

1,749 

1,336 

1,509 

1,650 

157 

416 

283 

342 

407 

233 

195 

209 

256 

276 

266 

210 

162 

182 

299 

92 

66 

88 

73 

65 

250 

253 

236 

260 

182 

231    315 

7     7 
9,801  11,960 


301          323         334 

6  7    5 

11,914     1^006    I%446 


2,618 
1,683 

1,688 

717 
305 
169 
229 
229 
330 
655 
12 


1,351 

|  607 

337 


18^36 


110 
108 
139 

74 
173 
285 
675 

22 

3,881 
15,841 


740 

1,153 

1,330 

12 

48 

79 

494 

708 

660 

78 

89 

49 

140 

190 

225 

154 

305 

278 

183 

135 

200 

82 

171 

135 

147 

243 

290 

239 

316 

376 

316 

314 

425 

653 

969 

911 

17 

35 

19 

"3^55 

4,676 

1977 

15,169 

16,682 

17,423 

^Estimates  near  close  of  harvesting  season. 
2Including  Mozambique  and  the  island  of  Reunion. 


SUGAR  197 

BEET  SUGAR 

The  growth  of  the  beet  sugar  industry  is  a  striking  ex- 
ample of  the  application  of  science  to  agriculture.  A 
German  chemist,  Andreas  Marggraf,  made  the  discovery 
about  1 7 50  that  beets  and  other  vegetables  contain  sucrose, 
white  beets  carrying  about  6  per  cent.  In  1802  one  of 
Marggrafs  pupils  operated  in  Silesia  the  first  beet  sugar 
factory  in  the  world.  Interest  in  the  new  enterprise 
spread  to  France  and  in  1811  Napoleon  issued  the  famous 
decree  by  which  beet  culture  and  beet  sugar  manufacture 
were  established  in  France.  A  domestic  supply  was  ur- 
gently needed  as  imports  from  the  West  Indies  were  cut 
off  by  the  British  blockade.  When  the  blockade  was 
raised  after  Napoleon's  defeat,  cane  sugar  was  again  avail- 
able and  all  European  beet  sugar  factories  suffered  tempo- 
rarily. The  new  industry  revived  after  a  few  years,  and 
great  progress  was  made  in  improving  the  quality  of  the 
root.  The  maximum  sugar  content  is  now  between  18 
and  21  per  cent. 

While  the  beet  will  grow  in  a  large  area  in  the  temperate 
zone,  its  chief  centers  of  production  are  France,  Belgium, 
and  the  Netherlands,  central  Germany,  Czechoslovakia, 
and  southwestern  Russia.  Beet  culture  extends  north- 
ward to  the  Scandinavian  countries  and  southward  to 
Spain  and  Italy.  In  the  United  States  beets  are  grown 
from  Ohio  to  California  and  as  far  north  as  Michigan  and 
Washington.  The  largest  crops  are  grown  in  Colorado 
and  California.  The  sugar  beet  requires  fertile  soil,  sun- 
light and  moisture  without  tropical  heat,  and  exceptionally 
careful  cultivation  and  hand  thinning. 

The  method  of  manufacture  is,  in  many  respects,  similar 


198          SOME  GREAT  COMMODITIES^ 

to  that  used  in  cane  sugar  manufacture,  but  the  juice  is 
extracted  by  the  diffusion  process.  Thinly  sliced  beets 
are  placed  in  large  tanks  which  are  then  filled  with  warm 
water.  The  sugar  held  in  solution  in  the  cells  of  the  beet 
passes  through  the  cell  walls  into  the  water.  This  operation 
is  repeated  until  practically  the  whole  of  the  sugar  content 
of  the  beet  has  been  removed.  Later  steps  include  satura- 
tion, evaporation  and  crystallization.  For  the  refining 
process  bone  black  or  charcoal  may  be  dispensed  with  or 
used  to  a  smaller  extent  than  in  cane  refining.  In  the 
United  States  most  factories  carry  out  all  steps  from  slicing 
to  refining,  but  in  Europe  many  beet  sugar  factories  turn 
out  raw  beet  sugar  which  is  later  sent  to  separate  refineries 
or  exported.  Formerly  considerable  quantities  of  raw  beet 
were  exported  from  the  Continent  to  Great  Britain  for  refin- 
ing at  port-side  refineries.  Beet  pulp  is  used  for  stock  feed, 
and  the  molasses  by-product,  like  cane  molasses,  may  be  re- 
worked for  its  sugar  content,  distilled,  or  used  in  cattle  feed. 

BEET   SUGAR    PRODUCTION 

Most  of  the  world's  beet  sugar  is  made  in  Europe,  but 
since  the  war  the  United  States  has  produced  more  beet 
sugar  than  any  other  single  country  save  Germany. 
Canada's  beet  sugar  industry  is  small  but  thriving,  and 
Australia  grows  about  a  thousand  acres  of  beets.  Beet 
culture  is  also  established  in  China. 

The  European  beet  sugar  industry  reached  its  maximum 
production,  8,300,000  tons,  in  1912-13  and  fell  as  low  as 
2,600,000  tons  in  1919-20.  While  there  has  been  steady 
improvement  since  that  season  Europe  is  thus  far  unable 
to  supply  its  own  needs.  Germany  has  been,  since  1880, 
the  largest  producer  of  beet  sugar  and  still  holds  first 


SUGAR  199 

place  although  several  German  beet  factories  and  a  con- 
siderable area  of  beet  fields  were  awarded  to  Poland. 
Austria  retains  only  a  fraction  of  its  former  capacity. 
Czechoslovakia,  which  fell  heir  to  the  greater  part  of  the 
Austrian  beet  industry,  now  occupies  second  place  among 
European  countries  and  produces  sugar  for  export  as  well 
as  for  home  use.  Russia  as  well  as  Germany  lost  to  Po- 
land. For  a  time  at  least  Russia  cannot  export  sugar  in 
significant  quantities.  Poland  had  70  factories  in  opera- 
tion in  1921,  but  their  output  was  only  30  per  cent,  of  the 
pre-war  output  in  the  same  area.  The  French  industry 
suffered  severely  from  the  destruction  of  factories,  and 
three  years  after  the  Armistice  France  was  still  importing 
more  sugar  than  she  exported.  Belgium,  the  Netherlands, 
Spain  and  Italy  hold  practically  the  same  position  as  be- 
fore the  war.  Production  of  beet  sugar  by  countries  for 
the  seasons  1913-14  and  from  1918-19  to  1921-22  is  in- 
cluded in  Table  B  on  page  196. 

For  many  years  British  refiners  of  cane  sugar  waged  a 
determined  battle  against  the  continental  system  of 
government  bounties  and  other  artificial  aids  to  beet  sugar 
production.  In  some  countries  the  beet  sugar  industry 
was  permitted  to  raise  the  price  of  sugar  exorbitantly  in 
the  home  market  in  order  to  undersell  cane  sugar  in  foreign 
markets.  British  refineries  found  their  cane  sugar  busi- 
ness steadily  declining  and  British  colonies  suffered 
severely  from  the  depression  in  the  cane  sugar  market. 
On  the  Continent  the  beet  sugar  refining  interests  profited 
liberally  at  the  cost  of  consumers  and  beet  growers.  The 
Brussels  Sugar  Convention  was  finally  signed  by  all  the 
principal  European  governments  except  Russia  in  1902 
and  became  effective  in  1903.  By  this  agreement  the 


200          SOME  GREAT  COMMODITIES 

signatory  governments  bound  themselves  to  collect  coun- 
tervailing duties  on  imported  sugar  on  which  bounties 
were  paid  in  the  producing  country.  Accordingly  bounty 
fed  sugar  from  Continental  countries  could  enter  the 
British  market  only  on  payment  of  duties  equal  to  the 
subventions  received  from  the  home  government.  Prac- 
tically free  competition  between  cane  and  beet  sugar  was 
soon  restored  and  the  immediate  result  was  cheaper  sugar 
for  Continental  consumers. 

In  1920  the  Convention  came  to  an  end  but  a  revival 
of  state  aid  to  beet  sugar  is  unlikely,  both  because  of  the 
financial  difficulties  of  Continental  governments  and  the 
probable  opposition  of  consumers.  Without  such  aid 
the  industry  is  unlikely  again  to  offer  severe  competition 
to  cane  sugar  in  the  world's  export  markets.  Its  domestic 
position,  however,  is  secure,  as  beet  culture  serves  several 
purposes  in  the  European  agricultural  system,  such  as 
providing  cheap  cattle  feed  and  filling  a  place  in  an  exact- 
ing system  of  crop  rotation.  In  France  the  use  of  im- 
proved agricultural  methods  in  the  devastated  regions 
and  the  future  rebuilding  of  factories  with  modern  equip- 
ment may  lead  to  more  economical  production. 

The  American  beet  sugar  industry  is  a  much  larger 
contributor  to  the  sugar  market  than  the  Southern  cane 
industry.  It  was  possible  to  increase  beet  sugar  produc- 
tion 20  per  cent,  in  the  crop  year  following  the  opening 
of  the  war  in  Europe,  but  after  the  entry  of  the  United 
States  into  the  war  some  of  the  increase  was  lost.  The 
outturn  of  the  crop  of  1920-21  showed  a  remarkable  ex- 
pansion in  production  which  was  practically  maintained 
the  following  year.  Efforts  to  establish  the  beet  sugar 
industry  in  the  United  States  began  in  1830  and  met  with 


SUGAR  201 

many  difficulties.  In  1890  only  three  beet  sugar  factories 
were  in  operation  in  the  United  States  and  their  combined 
capacity  was  only  10,000  tons  a  year.  Progress  has  been 
rapid  since  that  time.  In  the  season  1919-20  there  were 
1 06  beet  sugar  mills  in  the  United  States,  including  those 
under  construction.  In  1920  from  an  area  estimated  at 
about  900,000  acres  a  crop  just  under  1,000,000  tons  was 
produced.  This  is  far  less  than  the  proportionate  yield  in 
Europe.  Cost  of  production  is  high  compared  with  that 
of  Cuban  cane  sugar.  The  crop  is  marketed  exclusively 
in  the  United  States,  usually  no  farther  east  than  Buffalo 
and  Pittsburgh. 

Beet  sugar  crops  in  the  United  States  for  the  years  1890, 
1900,  1910  and  annually  thereafter  are  shown  in  Table  C. 

TABLE  C — BEET  SUGAR  CROPS  OF  THE  UNITED  STATES,  1890,  1900,  AND 

1910  to  1922 

Year  (gross  tons) 

1890-91..                                      3,000 

1900-01 77,000 

1910-11 455,000 

1911-12 541,000 

1912-13 624,000 

1913-14 655,000 

1914-15 646,000 

1915-16 780,000 

1916-17 735,000 

1917-18 683,000 

1918-19 675,000 

1919-20 653,000 

1920-21 969,000 

1921-22 911,000 

DISTRIBUTION   IN  THE   WORLD   MARKET 

Countries  important  in  the  sugar  trade  may  be  divided 
into  three  groups:  first,  those  which  are  regularly  net 
exporters;  second,  those  which  cannot  supply  their  own 
needs  and  are  therefore  net  importers,  and  third,  countries 


202          SOME  GREAT  COMMODITIES 

which  produce  sugar  primarily  for  their  own  use  and  in 
addition  either  export  or  import  as  circumstances  in  their 
own  or  in  the  international  market  require. 

Export  trade  since  the  war  is  carried  on  in  large  units 
principally  by  the  cane-producing  countries,  Cuba,  Java, 
Mauritius,  Hawaii,  Peru,  Brazil,  the  Philippines,  Domin- 
ican Republic,  and  Porto  Rico.  Other  West  Indian  islands 
contribute  a  considerable  quantity  of  sugar.  Cuba  and  Java 
are  the  great  sources  of  supply  and  their  combined  crops, 
which  formed  about  33  per  cent,  of  the  world's  production 
in  1920-21  are  almost  wholly  available  for  export.  Ha- 
waii, Porto  Rico,  the  Philippines,  and  Mauritius  regularly 
devote  80  per  cent,  or  more  of  their  output  to  export  trade. 

Prior  to  the  war,  Germany,  Austria-Hungary,  the 
Netherlands,  Belgium  and  Russia  were  net  exporters  of 
beet  sugar.  Net  exporters  of  beet  sugar  in  1920  included 
Czechoslovakia,  Poland,  the  Netherlands  and  Belgium. 
Germany  is  nearing  the  point  where  export  trade  can  be 
resumed.  The  prospects  of  present  and  former  Russian 
territories  are  problematical. 

The  great  importing  markets  are  the  United  States,  the 
United  Kingdom,  and  British  India,  which  rank  in  the  order 
given.  By  reason  of  the  large  domestic  and  insular  pro- 
duction and  the  preference  granted  to  Cuban  sugar,  the 
American  market  is  not  open  to  other  producers  save  to  a 
very  limited  extent.  The  United  Kingdom  gives  prefer- 
ence to  sugar  from  its  own  possessions  which,  however, 
supply  very  little  of  the  demand.  Competition  between 
selling  countries,  therefore,  centers  upon  the  markets  of 
the  United  Kingdom  and  India,  and  their  annual  pur- 
chases of  about  1,300,000  tons  and  500,000  tons,  respec- 
tively, represent  the  great  prizes  in  the  international  trade. 


SUGAR  203 

The  import  trade  of  Canada  and  China  is  of  considerable 
proportions  and  Japan  has  a  large  import  balance  after 
exporting  nearly  100,000  tons  of  sugar  annually. 

In  the  pre-war  period,  France  was  the  outstanding  rep- 
resentative of  the  third  group.  Its  beet  production  was 
practically  sufficient  to  meet  domestic  requirements.  In 
addition,  an  extensive  refining  industry  handled  imported 
raw  sugars,  permitting  considerable  exports  of  the  refined 
product.  Exports  and  imports  were  in  approximate 
balance,  the  net  movement  in  either  direction  being  de- 
termined by  conditions  in  the  international  market.  Since 
the  war  France  has  been  a  net  importer,  taking  as  much  as 
540,000  tons  net  imports  in  one  year.  This  is  abnormal, 
and  as  the  domestic  crop  improves  imports  are  being  cur- 
tailed. In  1921  the  imports  were  cut  down  by  half  and 
exports  were  increased. 

A  general  view  of  the  international  sugar  trade  is  af- 
forded by  Table  D  which  shows  average  production,  con- 
sumption, and  net  imports  or  exports  of  the  principal  coun- 
tries from  1909  to  1913. 

TABLE  D— PRODUCTION,  CONSUMPTION  AND  NET  IMPORTS  AND  EXPORTS 
OF  SUGAR  BY  PRINCIPAL  COUNTRIES— AVERAGE  FOR  1909  TO  1913 

Country  Consumption         Production  ^J^         j,^ 

(in  thousands  of  gross  tons) 

United  States 3,391  788  2,603 

British  India 2,830  2,251  579 

United  Kingdom 1,814  ...  1,814 

Germany 1,467  2,130  663 

Russia , .  1,181  1,404  223 

Austria-Hungary 683  1,417  734 

France 646  671  25 

Cuba 200  1,831  1,631 

Netherlands 117  217  100 

Java Ill  1,299  1,188 

Porto  Rico 31  311  280 

Hawaii 10  495  485 


2O4 


SOME  GREAT  COMMODITIES 


The  export  situation  is  indicated  in  some  detail  in  Table 
E,  which  shows  the  exports  in  1913  of  practically  all  sugar- 
producing  countries  whose  output  entered  into  interna- 
tional trade,  as  well  as  their  exports  in  1919  and  1920, 
so  far  as  information  is  available.  The  table  indicates 
graphically  the  disruption  in  European  sugar  trade  oc- 
casioned by  the  war,  and  the  expansion  in  the  exports  of 
most  non-European  sugar-producing  countries. 


iGross  exports. 

*Fiscal  years. 

*Not  available. 

4Net  imports. 

•Austria  alone,  net  imports. 

•November  and  December  only. 


TABLE  E— NET  EXPORTS  OF  SUGAR  FROM  PRINCIPAL  EXPORTING 
COUNTRIES,  1913,  1919  AND  1920 


Country 

Cuba 

Java  and  Madura 

Germany 

Austria-Hungary 

Czechoslovakia 

Hawaii2 

Porto  Rico2 

Mauritius 

Philippine  Islands 

Netherlands 

Peru 

Belgium 

Russia 

Poland 

Fiji  Islands 

British  Guiana 

France 

Dominican  Republic. . 

Martinique 

Trinidad  and  Tobago . 

Reunion 

Guadeloupe 

Barbados 

Brazil 

Jamaica. . . 


1913 

1919 

1920 

(in  gross  tons) 

2,409,625 

3,960,485 

'3,363,773 

1,257,268 

1,832,118 

1,481,320 

1,097,066 

3 

4(84,368) 

1,046,774 

3 

1282,899 

8(58,251) 
'259,323 

484,452 

477,393 

460,922 

335,703 

314,082 

373,890 

'184,804 

'298,040 

'179,581 

152,870 

129,502 

175,090 

131,167 

4(8,435) 

33,483 

1140,643 

267,734 

'246,013 

107,398 

4(26,628) 

14,083 

1  1145,018 

3 

«6,194 

3 

10,597 

94,366 

'64,348 

'72,985 

87,246 

'83,140 

'83,765 

84,428 

<(540,057) 

'(531,675) 

'77,605 

159,414 

153,278 

'39,527 

'7,365 

'15,907 

32.230 

37,775 

47,909 

'38,356 

'49,179 

'39,300 

'26,215 

'17,677 

'23,243 

9,774 

1  244,797 

'226,346 

5,139 

68,233 

107,413 

4,428 

'38,000 

'36,664 

SUGAR  205 

The  direction  of  exports  is  determined  primarily  by 
location  of  markets,  but  may  be  influenced  by  political 
control,  tariffs,  or  trade  connections.  The  fact  that  Cuba 
receives  tariff  preference  in  the  United  States  makes  it 
advantageous  to  dispose  of  as  much  of  the  crop  as  possible 
in  that  market.  This  fact  also  restricts  the  sale  of  West 
Indian  sugars  in  the  United  States  except  for  reexporta- 
tion after  refining.  Sugar  from  British  and  French  West 
Indian  colonies  receives  preferential  tariff  treatment  from 
the  home  governments.  Good  keeping  qualities  and  the 
ease  with  which  sugar  can  be  shipped  make  the  sugar  trade 
very  flexible.  Philippine  sugar  bears  the  cost  of  shipment 
to  New  York  and  sells  in  competition  with  Porto  Rican. 
Java  sugar  is  marketed  both  in  the  East  and  in  Europe. 
South  American  countries  such  as  Argentina  and  Peru, 
in  which  British  capital  is  invested,  pay  part  of  their 
trade  balances  in  sugar  shipped  to  the  United  Kingdom. 

Cuba  is  secure  in  the  position  of  foremost  exporter  of 
sugar  in  the  world.  Distribution  of  Cuban  exports  in  five 
pre-war  years  and  from  1918  to  1921  is  shown  in  Table  F. 

TABLE  F—  EXPORTS  OF  RAW  SUGAR1  FROM  CUBA,  1909-13,  AND  1918 

TO  1921 


Country  (5-r.)        1918  1919          192°  1921 

(in  gross  tons) 

United  States  ......     1,672,196    2,246,946  3,116,226  2,514,655  2,118,985 

United  Kingdom...         85,382       860,647     603,166    2661,584    2340,800 
Other  countries....         14,558        93,799     231,538     187,534      130,735 

Total  .........     1,772,136    3,201,392  3,950,930  3,363,773  2,590,520 

iThere  are  also  small  exports  and  imports  of  refined  sugar. 
Includes  amounts  exported  to  other  European  countries. 

British  India  is  normally  the  chief  purchaser  of  Java 
sugar,  but  in  1920  exceptional  prices  in  the  United  States 


206 


SOME  GREAT  COMMODITIES 


and  Europe  attracted  increased  quantities  to  the  west. 
Javan  exports,  however,  were  not  permanently  diverted 
from  pre-war  markets.  Shipments  from  the  crop  of  1921 
show  a  return  to  Eastern  markets.  Table  G  shows  aver- 
age annual  exports  for  the  fiscal  years  1909-13  and  exports 
from  1918  to  1921. 


TABLE  G — EXPORTS  OF  SUGAR  FROM  JAVA  BY  COUNTRIES 

1920  1921 


Country 


1909-1913 
(5-yr.  aver.) 


1918 


(in 


1919 
gross  tons) 


British     India     and 
Ceylon1  

466,823 

370  919 

355  716 

260479 

662  431 

Hongkong. 

194067 

321  589 

217  158 

158  606 

Q7Q  £Q6 

Port  Said  and  Suez, 
for  orders2  

168,414 

17788 

121  203 

306  720 

3 

Japan. 

148  787 

367  978 

369  596 

151  976 

9fi4  QQ9 

Straits     Settlements, 
Siam,    and   French 
Indo-China  

73,570 

195  034 

94763 

39948 

82  267 

Australia    and    New 
Zealand. 

46843 

6273 

112  556 

85892 

17542 

United  States. 

29  151 

8  103 

1  898 

245014 

300 

China  

24,938 

19,800 

1  955 

1638 

33876 

United  Kingdom  
Other     countries     of 
Europe  
Other  countries  

22,224 

18,427 
34,882 

73,877 

64,520 
68,261 

209,264 

272,528 
75,624 

55,321 

142,669 
33214 

10,126 

96,033 
116  168 

Total 1,228,126  1,514,142  1,832,261  1,481,477  1,656,671 

^Including  exports  to  Pondicherry. 
^Chiefly  to  Europe. 
'Not  separately  reported. 

Total  consumption  of  sugar  was  at  a  low  ebb  after  the 
war.  Reduced  purchasing  power  in  many  consuming 
markets  restricted  the  effective  demand,  and  disorganiza- 
tion of  industry  in  Europe  curbed  production.  Although 
over  18,000,000  tons  of  sugar  were  made  and  used  at  the 
opening  of  the  war,  less  than  16,000,000  tons  annually 
were  produced  in  the  two  years  after  the  Armistice.  Im- 


SUGAR  207 

provement  in  1920-21  brought  the  total  up  to  16,700,000 
tons.  In  the  United  States  per  capita  consumption  from 
1919  to  1921  was  at  about  the  same  rate  as  in  1914  and 
net  imports  were  larger  than  in  either  1913  or  1914. 
Evidently  reduction  in  sugar  consumption  occurred  else- 
where; in  Europe,  which  produced  less  than  before  the 
war,  in  the  United  Kingdom  where  industrial  depression 
affected  all  markets,  and  in  other  countries  which  re- 
duced their  purchases.  Consumption  expanded  notably  in 
1921-22. 

The  British  market  from  1914  to  1921  was  controlled 
by  the  Royal  Commission  on  the  Sugar  Supply.  This 
body  imported  the  entire  sugar  requirements  of  the  coun- 
try, distributed  to  refiners  and  manufacturers  and  finally 
enforced  rationing  measures.  The  Commission  closed 
its  active  operations  in  February,  1921,  with  a  net  loss  of 
about  £25,000,000,  which  was  the  cost  to  the  public 
treasury  of  maintaining  a  non-speculative  market  during 
and  after  the  war.  From  1,000,000  to  1,900,000  tons  of 
sugar  are  used  annually  for  home  consumption  in  the 
United  Kingdom.  Export  trade  is  almost  negligible. 

A  radical  change  took  place  from  1913  to  1920  in  the 
sources  of  imports.  In  1913  sugar  from  Europe  formed 
81  per  cent,  of  the  imports,  Cuban  cane  n  per  cent,  and 
other  sugar  8  per  cent.  In  1920  only  i  per  cent,  of  the 
total  was  beet  sugar,  the  Cuban  share  increased  to  38  per 
cent,  and  the  balance  was  other  cane  sugar.  Return  to 
pre-war  conditions  was  well  under  way  in  1921,  when 
European  sources  furnished  20  per  cent,  of  the  imports 
and  Cuba  the  same  percentage. 

Table  H  shows  imports  into  the  United  Kingdom  by 
countries  for  1913  and  from  1919  to  1921^ 


208 


SOME  GREAT  COMMODITIES 


TABLE  H — IMPORTS  OF  SUGAR  INTO  THE  UNITED  KINGDOM  FOR  1913  AND 

1919  TO  1921 


1913 


1919  1920 

(in  gross  tons) 


1921 


Country 

Raw  sugar 

Germany 

Austria-Hungary 

Other  countries  in  Europe .  .  . 

Java 

Cuba 

British  West  Indies1 

Peru 

Mauritius 

Brazil 

Other  countries  not  in  Europe 

Total 1,046,715  1,142,323  1,251,544     811,170 


472,026 

12,929 

160,858 

49,846 

1,137 

2,458 

13,957 

99 

172,838 

335,599 

26,172 

224,227 

587,252 

516,487 

256,798 

47,736 

113,307 

124,878 

111,733 

27,487 

77,577 

48,883 

73,385 

20,075 

153,682 

139,193 

184,748 

5,133 

6,971 

12,439 

79,964 

39,228 

29,559 

58,678 

64,413 

Refined  sugar2 
Germany. 

465  453 

253 

126 

1 

Austria-Hungary.  .  .  . 

198  064 

990 

102 

138 

Netherlands  

178,567 

20643 

1066 

91032 

Belgium. 

49764 

5532 

2068 

42979 

France.   . 

26572 

33 

294 

3058 

Other  countries  in  Europe.  .  .  . 
United  States  

3,448 
385 

712 
222,083 

103 
102,273 

107,371 
171  816 

Java. 

117060 

5014 

4340 

Other  countries  not  in  Europe 

292 

94,828 

8,766 

47,609 

Total 


922,545     462,134      119,812     468,344 


Grand  total 1,969,260  1,604,457  1,371,356  1,279,514 

Including  British  Guiana  and  British  Honduras. 
'Including  sugar  candy. 


THE  UNITED  STATES  MARKET 

Annual  consumption  of  sugar  in  the  United  States 
amounts  to  about  4,030,000  tons,  which  provides  nearly 
85  pounds  per  capita.  Sources  of  supply  may  be  roughly 
divided  as  follows:  Cuba  furnishes  about  one-half,  the 
domestic  beet  and  cane  production  together  about  one- 
fourth,  and  insular  possessions  the  remaining  fourth.  Any 
large  increases  which  may  occur  in  domestic  production 
and  that  of  Porto  Rico,  Hawaii  and  the  Philippines  are 


SUGAR  209 

likely  to  narrow  the  market  for  Cuban  sugar  in  this  coun- 
try, although  the  Cuban  product  costs  less  to  produce 
than  American  cane  or  beet.  Total  sugar  consumption 
in  continental  United  States  and  distribution  according 
to  sources  of  supply  for  the  years  1913,  1919?  1920  and 
1921  are  shown  in  Table  I. 

TABLE  I— CONSUMPTION  OF  SUGAR  IN  THE  UNITED  STATES 
AND  SOURCES  OF  SUPPLY 

1913      1919      1920      1921 
(in  gross  tons) 

Total  consumption 3,743,139  4,067,671  4,084,672  4,107,328 

Sources  of  supply: 

Louisiana  and  Texas  (cane) . .  207,708  154,034  81,625  272,773 

United  States  (beet) 625,314  872,253  454,446  946,977 

U.     S.     insular     possessions 

(cane) 

Hawaii1 506,555  514,824  390,552  482,322 

Virgin  Islands 8,286  10,490  5,170 

Porto  Rico 331,103  286,880  334,936  373,762 

Philippine  Islands 44,620  72,511  114,048  131,168 

Miscellaneous2 19,450  24,094  17,095  2,274 

Cuba  (cane) 1,990,831  2,077,051  2,127,461  1,866,153 

Foreign  countries  (cane  and 

beet) 17,558  57,738  554,019  26,729 

Total,  raw  and  refined. .     .  37743,139  4,067,671  4,084,672  4,107,328 
Consumption  of  refined  sugar.  3,678,144  3,899,944  3,474,770  3,895,026 


Deluding  a  small  quantity  of  refined  sugar. 
»Maple  sugar,  etc. 

To  a  greater  extent  than  any  other  country,  the  United 
States  reexports  imported  sugar  which  has  passed  through 
domestic  refineries.  Practically  no  raw  sugar  enters  into 
American  exports.  Europe's  increased  demands  during 
the  war  caused  great  expansion  in  American  exports, 
which  rose  from  an  average  of  32,000  tons  in  the  fiscal 
years  1910-14  to  700,000  tons  in  1916.  For  the  calendar 
year  1921  about  400,000  tons  of  refined  sugar  were  ex- 


2IO 


SOME  GREAT  COMMODITIES 


ported.  Since  early  in  the  war  the  United  Kingdom  and 
France  have  taken  over  half  the  exports,  the  remainder 
being  widely  distributed. 

Government  operation  figured  prominently  in  the  sugar 
market,  both  local  and  international,  during  and  after 


Average 
for  the  year 


TABLE  J— PRICES  OF  RAW  AND  REFINED  SUGAR 
IN  THE  UNITED  STATES 

Raw 

96  degree 

centrifugal 

duty  Pd.  N.  Y. 


Refined 

£.o.h. 
New  York 


(cents  per  pound) 


1900 4  60 

1901 4.00 

1902 3.50 

1903 3.70 

1904 4.00 

1905 4.30 

1906 3.70 

1907 3.80 

1908 4.10 

1909 4.00 

1910 4.20 

1911 4.50 

1912 4.20 

1913 3.50 

1914 3.80 

1915 4.70 

1916 5.80 

1917 6.30 

1918 6.40 

1919 7.50 

Price  on  15th  of  month  or  nearest  available  date. 

1920 

January 13.04 

February 12.04 

March 11.54 

April 18.56 

May 21.57 

June 19.56 

July 18.31 

August 13.04 

September 10.78 

October 8.03 

November 6.51 

December. .  4.63 


5.30 
5.10 
4.50 
4.60 
4.80 


5.30 


.50 
.70 
.90 
.80 
.00 
.30 
,10 
30 
,70 
60 


6.90 


70 
80 


8.90 


17.10 
14.75 
11.00 
10.00 
8.25 


SUGAR  2ii 

1921  Raw  Refined) 

January 5.52  7.75 

February 5. 77  7. 25 

March 6.02  8.00 

April 5.64  7.65 

May 4.89  6.50 

June 4.00  5.75 

July 4.37*  5.20 

August 4.75  6.00 

September 4.00  5.60 

October 4.11  5.30 

November 4.11  5.20 

December 3.67  5.20 

1922 

January 3.61  4.80 

February 3.67  5.00 

March 3.92  5.30 

April 3.86  5.25 

May 4.04  5.30 

June 4.48  5.80 


*No  open  market  for  refined  sugar  from  January  to  August  11.    Refiners  allocated  sugar 
to  regular  customers  at  non-competitive  prices. 

the  war.  In  1917  the  United  States  Food  Administration 
supervised  American  imports  of  raw  sugar,  prices  and  dis- 
tribution. An  international  sugar  committee  was  estab- 
lished later  in  the  same  year  to  procure  supplies  for  the 
Allies  as  well  as  the  United  States.  That  body  negotiated 
the  purchase  of  the  Cuban  crop  of  1917-18  from  a  Cuban 
commission. 

The  United  States  Sugar  Equalization  Board,  created 
by  the  President  in  1918,  with  the  Royal  Commission  on 
the  Sugar  Supply  purchased  the  Cuban  crop  of  1918-19. 
Regulation  of  domestic  trade  was  relaxed  in  1919  and  pur- 
chases for  England,  France  and  Italy  were  made  by  the 
Allied  Provisions  Export  Committee.  Reference  has  al- 
ready been  made  to  the  operations  of  the  Royal  Commission 
on  the  Sugar  Supply.  The  purchase  of  the  Cuban  crop 
of  1919-20  was  not  authorized  by  the  President  of  the 


212          SOME  GREAT  COMMODITIES 

United  States,  and  the  Equalization  Board  passed  out  of 
existence  early  in  1920.  The  marketing  of  the  Cuban 
crop  of  1920-21  was  placed  in  the  hands  of  the  Cuban 
Sugar  Finance  Committee  which  was  established  by 
decree  of  the  President  of  Cuba  in  order  to  "sell  the  sugar 
production  in  an  orderly  manner  and  .  .  .  so  as  not 
to  permit  the  establishment  of  an  artificial  price."  The 
Committee  exercised  its  powers  until  the  close  of  1921, 
but  its  efforts  to  market  the  crop  were  only  partly  success- 
ful, as  at  the  beginning  of  1922  stocks  of  more  than 
1,000,000  tons  of  sugar  remained  in  Cuba. 

With  increased  consumption  after  the  Armistice  there 
developed  in  1919  a  general  belief  in  the  existence  of  a 
serious  shortage  and  the  removal  of  government  control 
was  followed  by  excessive  speculation.  As  the  price  rose, 
imports  were  attracted  from  all  quarters  of  the  globe. 
The  year  1920  was  the  period  of  most  marked  fluctuations 
in  sugar  prices  ever  recorded  in  the  United  States.  The 
spectacular  fall  from  a  maximum  of  23.57  cents  a  pound 
duty  paid,  for  raws  (May  19,  1920)  to  4.63  cents  (Decem- 
ber 14,  1920)  will  long  be  remembered  in  the  trade.  Heavy 
stocks  of  sugar  were  carried  into  1921,  prolonging  the 
period  of  price  declines,  and  it  was  not  until  1922  that  re- 
covery began.  Yearly  average  prices  of  raw  and  refined 
sugar  from  1900  to  1919  and  quotations  on  the  fifteenth 
of  each  month  or  the  nearest  available  date  from  January, 
1920,  to  June,  1922,  are  shown  in  Table  J. 

NOTE:  Tables  A,  B,  C,  I  and  J  are  based  upon  statistical  material  from 
Willett  and  Gray's  Weekly  Statistical  Sugar  Trade  Journal. 


WHEAT 

WHEAT  is  the  main  bread  grain  of  all  of  Europe, 
North  and  South  America  and  Australia,  and  of 
the  white  population  of  Africa,  and  is  important 
as  a  food  even  in  the  rice-eating  nations  of  the  Orient, 
where  its  use  appears  to  be  increasing.  It  is  successfully 
grown  from  the  Tropics  to  the  Arctic  Circle  and  occupies 
nearly  half  as  much  area  as  all  other  reported  cereal  crops 
combined.  In  the  years  immediately  preceding  1914 
slightly  over  260,000,000  acres  were  sown  to  wheat,  and 
total  world  production  averaged  more  than  3,500,000,000 
bushels.  The  requirements  of  those  countries  whose 
domestic  crops  were  insufficient  for  their  needs  were  sup- 
plied chiefly  from  the  surplus  of  Russia  and  the  Balkan 
region  of  Europe,  the  United  States  and  Canada,  Argen- 
tina, Australia  and  India.  The  net  movement  from  the 
exporting  countries  averaged  584,000,000  bushels,  or 
about  one-sixth  of  the  total  world  crop. 

Before  the  war,  the  Russian  Empire  led  the  world  both 
in  acreage  planted  to  wheat  and  in  total  production.  The 
main  wheat  belt  is  in  the  southern  and  southeastern  parts 
of  European  Russia,  which  are  particularly  well  adapted 
in  climate  and  soil,  and  are  convenient  for  water  transport. 
About  one-fifth  of  the  total  Russian  crop  was  exported 
before  the  war,  being  shipped  primarily  through  Black 
Sea  ports.  Wheat  has  been  the  chief  cash  crop  of  the 
Russian  peasant.  Potential  production  of  wheat  in 

213 


214          SOME  GREAT  COMMODITIES 

Russia  is  very  great.  The  average  yield  is  only  ten  bush- 
els to  the  acre,  due  to  unintelligent  methods  of  farming 
as  well  as  to  erratic  rainfall.  Less  than  one-fifth  of  the 
total  Russian  crop  prior  to  the  war  was  produced  in  Asi- 
atic Russia,  which  is  probably  the  greatest  undeveloped 
wheat  area  of  the  world. 

The  United  States  ranks  next  to  Russia  as  a  wheat  pro- 
ducer, nearly  one-fifth  of  the  world  crop  having  been  grown 
here  prior  to  the  war.  Wheat  can  be  raised  in  practically 
all  sections  of  the  country,  but  the  surplus  which  feeds 
the  United  States  and  plays  a  considerable  part  in  making 
up  the  deficiency  of  the  European  supply  comes  from  the 
great  plains  region  west  of  the  Mississippi  River.  In  1920 
Kansas  alone  produced  more  than  one-sixth  of  the  total 
outturn  of  the  country,  and  the  seven  plains  states  of 
Kansas,  Nebraska,  North  Dakota,  South  Dakota,  Minne- 
sota, Oklahoma  and  Missouri  produced  over  half  of  the 
total  crop.  The  proportion  of  the  crop  exported  has 
varied  considerably,  averaging  immediately  prior  to  the 
war  less  than  one-sixth.  From  August  i,  1920,  to  July  3 1, 
1921,  exports  amounted  to  nearly  half  the  1920  crop,  a 
situation  made  possible  by  the  large  carry-over  from  the 
previous  harvest.  The  best  wheat  areas  of  this  country 
are  now  under  cultivation,  and  in  the  normal  course  of 
events,  as  the  United  States  becomes  more  and  more  an 
industrial  country  and  population  grows,  wheat  exports 
will  tend  to  decline. 

India  is  third  among  wheat-producing  countries.  The 
main  part  of  the  crop  is  grown  in  the  northwestern  prov- 
inces, and  nearly  half  the  crop  of  the  Punjab  is  grown 
under  irrigation.  Wheat  is  a  supplementary  cereal  crop 
in  India,  and  there  is  wide  variation  in  the  home  demand, 


WHEAT  215 

depending  not  only  upon  general  prosperity,  but  upon  the 
crops  of  rice  and  grain  sorghums.  Indian  exports  do  not 
average  more  than  one-sixth  of  the  total  crop,  and  the 
salability  of  the  grain  is  somewhat  impaired  by  lack  of 
grading  and  by  the  inclusion  of  dirt  from  the  threshing 
floor. 

The  great  importance  of  Europe  as  a  wheat  producer  is 
commonly  overlooked  because  of  heavy  European  grain 
imports,  which  are  due  not  to  failure  to  recognize  the 
importance  of  wheat  growing  or  to  lack  of  a  suitable 
climate  or  soil,  but  to  the  existence  of  a  dense  population 
which  has  maintained  itself  by  manufacturing,  and  has, 
therefore,  become  dependent  in  large  part  upon  an  im- 
ported food  supply.  Before  the  war,  Europe,  including 
Russia,  produced  half  of  the  entire  wheat  crop  of  the  world, 
and  exclusive  of  Russia,  the  European  crop  was  one-third 
of  the  world  crop.  The  French  crop  alone  from  1908  to 
1912  was  nearly  half  as  large  as  the  wheat  crop  of  the 
United  States,  although  the  area  of  France  is  only  four- 
fifths  of  the  area  of  Texas. 

Canada,  Australia  and  Argentina  are  all  factors  of  great 
importance  in  supplying  the  international  market.  Cana- 
dian prosperity  is  to  a  large  degree  dependent  on  the  wheat 
crop,  since  the  value  of  this  crop  is  equal  to  approximately 
one-third  of  the  value  of  all  farm  crops.  The  plains 
region,  extending  northward  from  the  great  wheat-growing 
section  of  the  United  States,  is  the  chief  producing  area 
of  the  Dominion.  The  large  estates  of  Argentina  and  the 
shifting  and  irresponsible  character  of  farm  labor  are  a 
serious  obstacle  to  the  development  of  improved  farming 
methods,  while  the  scarcity  of  foreign  capital  during  and 
since  the  war  has  militated  against  the  extension  of  trans- 


2i6  SOME  GREAT  COMMODITIES 

portation  facilities  and  the  opening  up  of  new  land.  Thus 
there  has  been,  of  late,  little  tendency  toward  increasing 
the  Argentine  crop  except  as  the  chance  result  of  favorable 
seasons.  In  Australia,  two-thirds  of  the  cultivated  land 
is  now  in  wheat.  In  each  of  these  countries  a  small  popu- 
lation accounts  for  the  large  exportable  surplus. 

The  consumption  of  wheat  cannot  be  ascertained  with 
any  degree  of  exactness,  because  not  only  are  crop  figures 
estimates  at  best,  but  it  is  also  impossible  to  secure  com- 
plete information  as  to  carry-over  from  one  harvest  to  the 
next  of  grain  in  farmers'  hands  or  of  flour  in  consumers' 
hands.  The  problem  of  estimating  consumption  in  ex- 
porting countries  is  distinctly  different  from  that  in  im- 
porting countries.  In  the  latter  group,  under  ordinary 
circumstances,  with  no  inducement  to  accumulate  an  ab- 
normally large  surplus  and  no  situation  resulting  in  a 
depletion  of  reserves,  the  carry-over  may  be  reckoned  at 
substantially  the  same  figure  at  the  end  of  a  given  harvest 
year  as  at  the  beginning.  In  such  a  situation  net  imports 
added  to  production  give  an  approximation  of  the  amount 
of  wheat  required  for  seeding  and  for  human  consumption, 
together  with  the  quantity  used  for  feed.  On  this  basis 
the  apparent  consumption  of  wheat  in  the  chief  importing 
countries  prior  to  and  since  the  war  is  presented  in  Table 
A,  which  shows  also  production  and  net  imports  for  those 
years.  It  may  be  assumed  that  these  countries,  particu- 
larly the  European  ones,  had  but  small  reserves  at  the 
close  of  the  harvest  year  ending  July  31,  1918,  nor  does 
a  normal  reserve  appear  to  have  been  accumulated  up  to 
August  i,  1922. 

Western  Europe  is  the  chief  area  of  wheat  deficiency. 
The  United  Kingdom  alone  took  prior  to  the  war  almost 


WHEAT  217 

half  the  total  imports  of  the  countries  enumerated,  while 
Germany  took  nearly  one-seventh,  Italy  and  Belgium 
each  about  one-tenth  and  France  one-fifteenth.  Since 
1918  the  total  production  of  the  designated  importing 
countries  has  been  less  than  the  pre-war  average,  and  the 
quantity  of  wheat  apparently  available  for  consumption 
has  likewise  been  less,  although  net  imports  in  1919-20 
and  1920-21  were  higher  than  before  the  war.  In  1921, 
however,  all  the  countries  enumerated  except  Belgium 
and  Germany  estimated  outturns  greater  than  before  the 
war,  and  the  total  estimated  production  was  25,000,000 
bushels  above  the  pre-war  level.  The  population  of 
Europe  has  increased  relatively  little  since  1914. 

Wheat  is  consumed  chiefly  in  the  form  of  flour,  and  as 
indicated,  the  figures  of  trade  in  and  apparent  consump- 
tion of  wheat  in  the  above  table  and  in  that  following 
include  flour  reduced  to  wheat  equivalent.  In  most 
European  countries  a  large  part  of  the  wheat  required  is 
imported  in  the  form  of  grain  and  milled  within  the  coun- 
try. In  fact,  prior  to  the  war  Austria-Hungary,  Belgium, 
France,  Germany,  Italy  and  Spain,  though  importers  of 
wheat,  were  customarily  exporters  of  flour  to  varying 
degrees,  supplying  principally  neighboring  countries  of 
deficiency  or  their  own  outlying  colonies.  The  greater 
part  of  Africa,  western  Asia,  some  of  the  South  American 
countries,  the  West  Indies  and  the  islands  of  the  Pacific, 
where  milling  is  little  developed,  receive  their  wheat  sup- 
plies chiefly  in  the  form  of  flour. 

Russia  was,  prior  to  the  war,  the  chief  wheat-exporting 
country  of  the  world,  furnishing  to  the  international  mar- 
ket an  average  of  more  than  150,000,000  bushels  per  year. 
The  difficulties  of  transport  during  the  war  and  the  un- 


2i8          SOME  GREAT  COMMODITIES 


TABLE  A— PRODUCTION,  NET  IMPORTS  AND  APPARENT  CONSUMPTION  OF  WHEAT, 

COUNTRIES,  FIVE-YEAR  PRE-WAR 


1908-09  to  1912-13 
(5-yr.  average) 

Production*  imN£rts,  <*£££»£„,  Production' 
(in  thousands  of  bushels) 


Belgium 

14618 

49  526 

Denmark  

4,868 

5827 

France. 

317  070 

32794 

Germany 

145  578 

66  992 

Italy  

Netherlands.  . 

171,114 

4  887 

53,027 
20427 

Norway 

307 

3347 

Spain  

131  948 

3  784 

Sweden. 

7612 

7091 

Switzerland  

3,303 

816202 

United  Kingdom.  .  .  . 
Japan 

59,081 
23  500 

211,971 
2  902 

Egypt  

*33  205 

7421 

Tunis. 

5327 

926 

Union  of  South  Africa 

•5,454 

5,930 

Total  of  countries 
enumerated"  

927,872 

488,167 

64,144 

4,919 

9 

10,695 

6,330 

6266 

349,864 

225,715 

71,455 

212,570 

93,274 

3 

224,141 

183,277 

92,614 

25,314 

5,274 

11,812 

3,654 

1,087 

6,804 

135,732 

135,697 

11,452 

14,703 

8,887 

4,733 

819,505 

5,232 

86,443 

271,052 

96,078 

171,631 

26,402 

31,013 

6,815 

40,626 

32,137 

980 

6,253 

11,941 

53,574 

11,384 

8,337 

1,467 

1918-19 

Net          Apparent 
imports*  consumption* 


6,064 
297,170 

275,891 

17,086 

7,891 

147,149 
13,620 

811,675 

267,709 

37,828 

33,117 

8,367 

9,804 


1,416,039         849,198       382,366        1,133,371 

^Harvests  of  1908-12,  1918,  1919,  1920  and  1921,  for  countries  in  the  Northern  Hemisphere; 
1908-09  to  1912-13, 1918-19, 1919-20, 1920-21  and  1921-22,  for  countries  in  the  Southern  Hemi- 
sphere. 

*European  harvest  years,  August  1  to  the  following  July  31,  for  countries  in  the  Northern  Hemi- 
sphere; calendar  years  1909-13,  1919,  1920  and  1921  for  countries  in  the  Southern  Hemisphere. 
Includes  flour  reduced  to  wheat  equivalent  on  the  basis  of  a  75  per  cent,  milling  ratio. 

»Not  available. 

«Net  imports  are  for  the  period  July  1,  1920,  to  June  30,  1921. 


WHEAT 


219 


INCLUDING  FLOUR  REDUCED  TO  WHEAT  EQUIVALENT,  IN  THE  CHIEF  IMPORTING 
AVERAGE  AND  1918-19  TO  1921-22 


Production* 


10,564 

5,922 

187,074 

79,694 

169,753 

5,694 

1,071 

129,238 

9,508 

3,523 

71,504 

30,673 

30,134 

6,981 

5,129 


1919-20 

Net 
imports2 

29,533 
1,526 

87,144 

«12,000 

79,317 

18,630 

6,349 

17,139 

7,373 

812,146 

210,551 

12,685 

8,714 

6864 

6,825 


746,462          509,068 


Apparent 
consumption* 


Production1 


(in  thousands  of  bushels) 


40,097 

7,448 

274,218 

91,694 
249,070 

24,324 

7,420 

146,377 

16,881 
815,669 
282,055 

43,358 

38,848 

6,117 

11,954 


1,255,530 


10,274 

7,389 

236,908 

82,575 

141,324 

5,765 

999 

138,592 

10,527 

3,586 

56,834 

28,406 

31,707 

5,228 

8,112 


768,226 


1920-21 

Net 
imports1 

«32,168 

334 

67,626 

734,583 

98,020 

18,717 

3,786 

19,778 

6,535 

813,781 

198,108 

5,737 

8,976 

"1,002 

1,443 


Apparent 
consumption' 

«42,442 

7,723 

304,534 

U17.158 

239,344 

24,482 

4,785 

158,370 

17,062 

817,367 

254.942 

34,143 

40,683 

106,230 

9,555 


510,594          1,278,820 


1921-22 
Production* 


14,494 

11,206 

322,738 

107,789 

192,819 

8,685 

972 

145,137 

12,576 

3,799 

73,800 

26,918 

37,007 

10,622 

8,688 


977,250 


•Net  exports. 

•Estimated;  net  imports  from  January  1,  to  July  31, 1920,  amounted  to  7,680,000  bushels. 

'Exclusive  of  net  imports  during  the  first  four  months  of  1921,  for  which  data  are  not  available. 

•Exclusive  of  net  imports  of  flour  for  which  data  are  not  available. 

•Four-year  average. 

"Net  imports  are  for  the  period  from  September  1,  1920,  to  August  31, 1921. 

"Exclusive  of  those  for  which  data  are  not  available,  as  noted. 


220          SOME  GREAT  COMMODITIES 

settled  conditions  within  the  country  since  that  time  have 
eliminated  Russia  as  an  exporting  country  and  have 
culminated  in  the  present  food  shortage  there,  following 
the  failure  of  the  1921  crop.  The  deficiency  in  the  inter- 
national supply  as  a  result  of  Russia's  withdrawal  has, 
however,  been  made  up  by  increased  production  in  other 
countries. 

The  brunt  of  supplying  the  deficiency  was  borne  by 
the  United  States  and  Canada,  not  only  because  of  their 
facilities  for  increasing  production  but  also  because  of 
the  short  haul  in  shipping  to  Europe.     From  a  pre-war 
production  of  666,877,000  bushels  the  yield  in  the  United 
States  climbed  to  the  record  crop  of  1,025,801,000  bushels 
in  1915,  and  the  average  production  for  the  war  years  was 
8°5>o53>°oo  bushels.     Canada  likewise  increased  its  out- 
turn to  an  average  during  the  war  of  nearly  270,000,000 
bushels,  as  compared  with  a  pre-war  average  of  173,247,000 
bushels.     Argentina  and  Australia  increased  production 
also.     The  former  averaged  during  the  war  years,  with 
the  exception  of  1916-17  when  the  yield  was  very  poor, 
186,505,000  bushels  and  the  latter  averaged  130,464,000 
bushels,  as  compared  with  a  pre-war  outturn  of  157,344,000 
bushels  and  82,340,000  respectively.     The  difficulty  of  re- 
leasing ships  for  the  long  haul  required  to  transport  the 
wheat  to  Europe,  however,  made  it  hard  to  use  these 
supplies,  and  the  close  of  the  war  found  large  accumula- 
tions of  grain  in  both  countries.     This  grain  was  later 
worked  off  in  increased  exports  to  Europe,  and  at  the  close 
of  the   1920-21    harvest  year  reserves  in    all  exporting 
countries  had  been  reduced  close  to  the  normal  carry- 
over. 
The  average  production,  net  exports  and  quantity  of 


WHEAT  221 

wheat  available  for  consumption  in  the  chief  exporting 
countries  prior  to  1914  are  shown  in  Table  B,  together  with 
similar  figures  for  the  period  since  the  close  of  the  war.  It 
must  be  remembered,  however,  that  the  quantity  availa- 
ble for  consumption  includes  carry-over,  and  in  several 
of  the  exporting  countries  the  figures  give  evidence  of  the 
backing  up  of  supplies. 

Total  production  in  the  countries  enumerated,  exclusive 
of  Russia,  has  not  since  the  war  reached  the  earlier  level 
when  that  country  was  included,  but  because  of  the  ac- 
cumulation of  grain  in  the  Southern  Hemisphere  and  the 
fortune  of  favorable  crops  net  exports  have  been  above 
the  pre-war  figure.  The  requirements  of  the  1921-22 
harvest  year  have  been  met  entirely  from  current  produc- 
tion, thus  demonstrating  that  even  without  Russia  the 
world's  present  bread  needs  can  be  met  so  long  as  harvests 
are  reasonably  good.  Supply  and  demand  are  nicely 
balanced,  however,  and  a  serious  crop  failure  probably 
would  cause  a  world  shortage  of  wheat. 

The  flexibility  of  the  wheat  crop  in  meeting  unusual  con- 
ditions is  well  shown  by  the  adjustments  of  the  war  years, 
but  in  general,  allowance  must  be  made  for  a  certain  lag 
in  the  response  to  altered  circumstances.  Almost  a  year 
intervenes  before  an  increased  or  a  decreased  planting 
can  affect  world  supply.  The  relative  inelasticity  of 
demand  for  wheat  causes  a  quick  reflection  in  price  of 
any  maladjustment  between  supply  and  demand.  While 
other  factors,  such  as  inflation,  must  also  be  taken  into 
account  in  following  the  course  of  the  American  wheat 
price  since  1914,  a  fear  of  shortage  in  the  main  consuming 
centers,  partly  justified  and  partly  the  result  of  the  specu- 
lative spirit  of  the  time,  was  an  underlying  factor  in  the 


222 


SOME  GREAT  COMMODITIES 


TABLE  B— PRODUCTION,  NET  EXPORTS  AND  APPARENT  CONSUMPTION  OF 
EXPORTING  COUNTRIES,  FIVE-YEAR  PRE-WAR 


1908-09  to  1912-13 
(5-yr.  average) 


Produc- 
tion* 


Net 
exports1 


Apparent 


Northern  Hemisphere— 
Austria,  Hungary  and 

the  Balkan  States  . . . 
Russia  (in  Europe  and 

Asia,  excl.  Finland) . . . 

Algeria 

India 

Canada 

United  States 


Estimated 
carry-over 

above 
normal  at 
beginning 
of  harvest 

year 
1918-19 

(in  thousands  of 
bushels) 


Produc- 
tion1 


1918-19 


Net 
exports' 


364,543     55,566          308,977 


734,942 
33,573 
323,899 
173,247 
666,877 


150,880 
4,795 
48,317 
79,149 
96,740 


Southern  Hemisphere — 

Argentina 157,344  94,918 

Chile 22,378  2,417 

Uruguay 7,196  1,389 

Australia 82,340  49,415 


Total  of  countries 
enumerated11 2,566,339 


584,062 
28,778 

275,582 
94,098 

570,137 


62,426 

19,961 

5,807 

32,925 


867,000 


90,000 

3 
3 

158,000 


<63,878 


49,232 
370,384 
189,075 
921,438 


8,873 

13,585 

95,849 

276,868 


171,586  123,874 

20,278  2,509 

6,890  1,373 

78,021  109,999 


583,586        1,982,753       181,000      1,870,782        632,930 

'Harvests  of  1908-12,  1918,  1919, 1920, 1921  for  countries  in  the  Northern  Hemisphere;  1908- 
09  to  1912-13,  1918-19,  1919-20,  1920-21,  1921-22  for  countries  in  the  Southern  Hemisphere. 

*European  harvest  years,  August  1  to  the  following  July  31.  for  countries  in  the  Northern 
Hemisphere;  calendar  years  1909-13, 1919,  1920, 1921  For  countries  in  the  Southern  Hemisphere. 
Includes  flour  reduced  to  wheat  equivalent  on  the  basis  of  a  75  per  cent,  milling  ratio. 

8Not  available. 

'Exclusive  of  Hungary  and  Jugoslavia,  for  which  data  are  not  available. 

'Exclusive  of  Hungary,  Transylvania,  Slovakia  and  Sub-Carpathian  Russia,  for  which  data 
are  not  available. 


WHEAT 


223 


WHEAT,  INCLUDING  FLOUR  REDUCED  TO  WHEAT  EQUIVALENT,  IN  THE  CHIEF 
AVERAGE,  AND  1918-19  TO  1921-22 


1919-20 


1920-21 


1921-22 


Apparent 
consump- 
tion* 


Produc-      Net  Produc- 

tiom      exports'      "*£!?»•       tion* 


Apparent 


40,359 

356,799 

93,226 

577,570 


(in  thousands  of  bushels) 
'167.234          *  «  204,382  «     725,608 


3  > 

14,484  1,932 

280,233  2,070 

193,260  91,358 

934,265  232,487 


t 

12,552 
278,163 
101,902 
701,778 


6,797 
377,850 
263,189 
787,128 


'5,578 

15,052 

165,784 

302,948 


'229,990 

s 

12,375 
362,798 

97,405 
484,180 


260,316 


33,760 
250,444 
300,858 
794,893 


137,712 

17,769 

5,517 

126,022 


214,121  »198,603 

19,918  1,305 

5,948  59 

47,423  61,908 


15,518 
18,613 


169,739 

25,177 

7,768 

150,469 


•62,317 

2,030 

367 

115,538 


107,422 

23,147 

7,401 

34,931 


154,859 
23,658 
12,124 

136,449 


1,354,974      1,876,886       589,722      "1.134,415   1,992,499       632,850        1,359,649      1,967.361 

•Exclusive  of  net  exports  from  Bulgaria  from  March  1  to  July  31,  1921. 
7Net  imports. 

8Short  of  average  carry-over. 
•Gross  exports. 

"With  carry-over  from  previous  year  of  about  75,000,000  bushels,  there  were  left  for  seeding 
and  consumption  about  60,515,000  bushels. 

"Exclusive  of  those  for  which  data  are  not  available,  as  noted. 
"Exclusive  of  Australia. 


224          SOME  GREAT  COMMODITIES 

movement  of  prices  during  that  period.  Table  C  shows 
prices  of  representative  grades  of  wheat  on  the  fifteenth 
of  each  month,  or  nearest  available  date,  from  1913 
through  1921. 

The  factors  entering  into  demand  are  much  more  com- 
plicated than  are  those  which  determine  exportable  sur- 
plus, and  the  supply  of  other  cereals  and  breadstuffs  must 
also  be  taken  into  consideration.  Rye  is  extensively  used 
as  a  bread  grain  in  most  north  European  countries,  and 
to  a  less  extent  elsewhere.  A  number  of  wheat-importing 
countries  are  important  producers  of  rye.  In  such  coun- 
tries, in  times  of  dearth  or  when  wheat  is  unduly  expensive, 
it  is  always  possible  to  consume  more  rye  as  a  bread  grain, 
if  it  is  available,  and  thus  to  reduce  wheat  importations. 
It  is  significant  that  before  the  war,  net  exports  of  rye  from 
Germany  amounted  to  more  than  one-third  of  the  net 
imports  of  wheat.  While  it  is  true  that  a  large  part  of 
the  rye  crop  is  customarily  used  to  feed  animals,  and 
measured  in  terms  of  net  exports  only  a  little  more  than 
one-twentieth  of  the  total,  or  80,000,000  bushels,  entered 
into  international  trade  before  the  war,  nevertheless,  con- 
ditions affecting  the  supply  of  and  demand  for  rye  are 
always  of  great  importance  in  correctly  appraising  the 
wheat  situation. 

World  production  of  rye  is  almost  half  that  of  wheat. 
In  Table  D  is  shown  rye  production  by  countries  in  the 
pre-war  years,  and  1918,  1919,  1920  and  1921,  so  far  as 
data  are  available.  It  will  be  noted  that  rye  is  raised 
principally  in  the  north  European  countries.  It  will  grow 
in  a  less  fertile  soil  and  in  a  more  severe  climate  than 
wheat.  Efforts  to  increase  the  rye  crop  in  Canada  have 
not  been  without  effect,  production  in  1921  being  eleven 


WHEAT 


225 


TABLE  C— PRICE  OF  WHEAT  AT  CHICAGO  ON  THE  FIFTEENTH  OF  EACH 
MONTH  FROM  1913  TO  1920 


Month  1913      1914      1915      1916      1917      1918      1919 

(in  dollars  per  bushel) 

NO.    1   NORTHERN  SPRING 


January 91 


February 
March.  .  . 

April 

May 

June 

July 

August. . . 
September 
October.  . 
November. 
December. 


1920      1921 


NO.  2  RED  WINTER 


January 1 . 11  * 

February 1 .05 

March 1.02 

April 1.04 

May 1.04* 

June 1.03 


July. 

August 

September. 
October.  .  . 
November. 
December. 


.84{ 

.861 

.91 

.901 

.94 

.95| 


.96* 

.95i 

.94 

.94 

.96 

.90 

.78^ 

.90; 

1.01 

1.09 

1.13 

1 


.53 
.58 
.60 


1.281 
1.26$ 


.131 
.17J 


.11 

.22 

.03 

.13 
1.19 
1.14}     1. 
1.21*   31. 


13 
19 
181 

f1 


1.92 

1.77 

1.86* 

2.62* 

3.10 

2.77 

2.15 

2.24 

2.17 

2.17 

2.17 

2.17 


2.17 

2.17 

2.17 

2.17 

2.17 

2.17 

2.25 

2.23 

2.24* 

2.24 

2.24 

2.30* 


2.41 
2.30 
»2.35 
»2.57 
«3.00 
i 

2.23 

2.23* 

2.23* 

2.24 

2.29* 

2.45 


2.65 

2.40 

2.47 

2.75 

3.06 

2.95 

2.85 

2.56 

2.49 

2.39 

2.11f 

2.00 


*No  quotation. 

2Nominal. 

Quotation  for  seventh  of  the  month. 


1.98 
2.01 
1.65 
1.24 
1.54 
1.40 
1.31 
1.25 
1.27 
1.22 
1.15 
1.14 


times  the  pre-war  average,  and  nearly  double  the  outturn 
in  any  other  year  since  that  time.  The  1921  crop  of  the 
principal  producing  countries  for  which  comparable  data 
are  available  was  about  40  per  cent,  greater  than  that 
of  1920. 

Barley  is  also  used  for  human  food,  alone  or  in  combina- 
tion with  wheat,  in  a  number  of  countries.  Moreover, 
the  milling  equivalent  of  wheat,  which  before  the  war  was 
roughly  estimated  to  be  about  75  per  cent.,  can  be  raised, 
and  potato  flour,  corn  flour  and  rice  flour  can  be  combined 
with  wheat  flour  in  the  making  of  bread.  Not  the  least 
important  consideration  in  reckoning  the  supply  of  food- 


226 


SOME  GREAT  COMMODITIES 


TABLE  D— RYE  PRODUCTION  IN  PRINCIPAL  COUNTRIES 


1908-12 
(5-yr.  aver.) 


1918 


1919 


1920 


1921 


(in  thousands  of  bushels) 


Austria,  Hungary   and  the 

Balkan  States 

Belgium 

Denmark 

Finland 

France 

Germany 

Greece 

Italy 

Luxemburg 

Netherlands 

Norway 

Poland 

Portugal 

Russia  (in  Europe  and  Asia) 

Spain 

Sweden 

Switzerland 

United  Kingdom 

Canada 

United  States 

Total   of  countries   enu- 
merated7      1,689,366  603,356  631,010  579,203  800,572 

Exclusive  of  Hungary,  Jugoslavia,  Transylvania,  Slovakia,  and  Sub-Carpathian  Russia, 
for  which  data  are  not  available. 
2Not  available. 

81911  only;  data  for  other  years  not  available. 
Including  maslin. 
'Four-year  average. 
•Ireland  only. 
'Exclusive  of  those  for  which  data  are  not  available,  as  noted. 


175,672 

'54,314 

'57,958 

85,148 

112,116 

22,795 

5,446 

14,505 

18,169 

21,274 

18,292 

12,727 

14,909 

13,242 

12,205 

2 

8,639 

10,506 

9,173 

10,386 

49,354 

28,936 

30,579 

34,494 

44,496 

433,549 

316,483 

240,174 

194,266 

267,662 

3219 

1,012 

1,123 

1,360 

43,152 

65,264 

5,232 

4,571 

4,539 

5,634 

622 

387 

368 

338 

488 

15,973 

12,954 

14,290 

14,246 

16,646 

952 

1,012 

983 

970 

1,043 

2 

2 

103,049 

73,663 

167,224 

2 

4,838 

3,856 

5,154 

2 

877,705 

2 

2 

2 

2 

27,336 

30,446 

23,297 

27,831 

29,119 

24,734 

19,293 

23,074 

23,056 

27,813 

1,665 

1,850 

1,575 

1,622 

1,800 

246 

^242 

«143 

"136 

•141 

1,977 

8,504 

10,207 

11,306 

21,455 

33,011 

91,041 

75,843 

60,490 

57,918 

stuffs,  particularly  in  the  present  situation  in  view  of  the 
impaired  purchasing  power  of  many  European  peoples, 
is  the  knowledge  gained  during  the  war  of  the  use  of  sub- 
stitutes not  only  for  wheat  flour  but  for  bread  itself,  and 
the  extension  of  the  habit  of  using  them.  Thus,  aside 
from  the  use  of  potatoes  in  the  form  of  potato  flour,  they 
are  a  wheat  substitute  to  an  extent  perhaps  only  to  be 
measured  by  the  supply  in  relation  to  the  supply  and  price 


WHEAT  227 

of  wheat,  and  the  availability  of  other  foods  which  can 
supply  the  food  elements  which  potatoes  lack.  Corn- 
meal,  widely  used  for  food  in  the  United  States,  is  an  ac- 
cepted article  of  food  in  some  parts  of  the  Danube  Basin 
which  normally  export  wheat,  and  also  in  Italy.  Large 
crops  of  corn  and  other  coarse  grains  may  indirectly  lessen 
the  demand  for  wheat  by  rendering  available  ample  sup- 
plies of  animal  products  at  relatively  low  prices. 

While  in  any  one  country  the  entire  wheat  crop,  like 
that  of  other  agricultural  products,  becomes  available 
within  a  short  time,  the  world  supply  is  replenished  at 
frequent  intervals.  Every  month  in  the  year  finds  wheat 
being  harvested  in  some  part  of  the  globe,  as  is  shown  in 
the  accompanying  chart.  This  fact  decreases  the  neces- 
sary cost  of  marketing  wheat  by  lessening  the  time  be- 
tween harvesting  and  consumption  during  which  the  sup- 
ply must  be  carried  by  some  one.  Moreover,  climatic 
risks  are  scattered,  so  that  both  in  time  and  quantity 
the  danger  of  crop  failure  in  one  section  has  a  reasonable 
chance  of  being  offset  by  a  particularly  favorable  out- 
turn elsewhere.  Production  in  the  Northern  Hemisphere 
is,  generally  speaking,  fairly  reliable,  but  the  Southern 
Hemisphere  crops  and  those  of  India  are  subject  to  greater 
climatic  hazards,  and  the  outturn  shows  marked  variation 
despite  relatively  constant  acreage.  For  example,  the 
Australian  crop  of  1914-15  amounted  to  only  25,000,000 
bushels,  and  the  country  became  a  net  importer  during 
the  following  season,  although  the  area  planted  was  some- 
what larger  than  that  of  the  previous  year  when  over 
100,000,000  bushels  were  produced. 

Apart  from  the  unprecedented  conditions  arising  out 
of  the  World  War,  the  population  of  the  world  is  far  from 


228 


SOME  GREAT  COMMODITIES 


WHEAT  HARVESTING  SEASONS  IN  DESIGNATED  COUNTRIES1 


COUNTRY 

JAN. 

FEB. 

MAR. 

APR 

MAY 

JUNE 

JULY 

AUG. 

SEPT. 

OCT. 

NOV. 

DEC. 

Argentina 
Australia 
Chile 
British  India 
Egypt 
Algeria 
Tunis 
Morocco 
Spain 

Hnit**H     ^totoft 

M^MMM 

••••MB 

» 
i 

| 

•••••••• 

— 
^•M 
•••• 

•••» 
•••» 

•••> 

—  — 

•> 

Italy 
Montenegro 
Hungary 
Austria 

— 

Rumania 
Germany 
Belgium 
Luxemburg 

Norway 
Canada 
Russia 
Japan 

••l^BHMl 



oweden 
Netherlands 
Switzerland 
Great  Britain 
Ecuador 

Peru 
Bolivia 
Paraguay 
Brazil 
Union  of  &  Africa 
New  Zealand 

1 

*ATIC 

NAL 

BANH 

OF 

= 

= 

h-..-.i  a— 

•••• 
••••• 
«MM 

ORK 

:oMrv 

E.RCE 

•••••• 

.  IN  I1 

• 
«••••• 

mmim 
• 

1EW 

»As  compiled  by  the  United  States  Department  of  Agriculture. 


WHEAT  229 

pressing  against  its  wheat  supply.  Large  areas  suitable 
for  growing  wheat  have  not  yet  been  developed,  notably 
in  Siberia  and  Canada.  A  potential  source  of  increased 
production  probably  still  more  important  in  the  aggregate 
is  the  possibility  of  more  intensive  use  of  the  land  already 
devoted  to  wheat.  There  is  wide  variation  among  coun- 
tries in  yield  per  acre,  which  is  not  altogether  due  to  differ- 
ences in  climate  and  the  fertility  of  the  soil.  The  "black 
earth"  of  southern  Russia  is  one  of  the  most  fertile  of 
soils,  yet  the  average  yield  of  wheat  per  acre  prior  to  the 
war  was  only  ten  bushels,  whereas  Germany  and  the  United 
Kingdom  each  produced  about  thirty  bushels  to  the  acre. 
Table  E  shows  average  yields  of  wheat  per  acre  in  principal 
producing  countries  before  the  war,  as  reported  to  the 
International  Institute  of  Agriculture.  The  highest  aver- 
age yield  reported  was  forty-six  bushels  in  Denmark.  The 
selection  and  development  of  suitable  high-yielding  va- 
rieties of  wheat  frequently  plays  an  important  part  in 
increasing  production  without  extending  acreage. 

The  factors  which  make  a  favorable  environment  for 
wheat  raising  are  numerous  and  their  relative  importance 
is  not  definitely  known.  A  warm,  humid  climate  encour- 
ages the  development  of  injurious  diseases  and  therefore 
is  not  desirable,  while  at  least  nine  inches  of  annual  rain- 
fall appear  to  be  necessary  unless  irrigation  is  to  be  re- 
sorted to.  Even  more  important  than  amount  is  the  dis- 
tribution of  the  rainfall,  to  provide  moisture  during  the 
growing  season  and  warm,  dry  harvest  weather.  Silt 
and  loam  of  high  fertility  and  with  large  humus  content 
seem  to  be  the  most  successful  soils  for  wheat.  As  a 
consequence,  most  of  the  great  wheat  areas  of  the  world 
are  rolling  plains,  and  in  Italy  alone  are  the  fields  not 


230          SOME  GREAT  COMMODITIES 

sufficiently  level  for  the  use  of  machinery  in  planting 
and  harvesting. 

TABLE  E— AVERAGE  YIELD  OF  WHEAT  PER  ACRE,  1908-12   (1908-09  TO 
1912-13  IN  THE  SOUTHERN  HEMISPHERE)  IN  PRINCIPAL  COUNTRIES 

Bushels  Bushels 

Country  per  acre        Country  per  acre 

Austria 20.4        Switzerland .  231.1 

Belgium 37.3        United  Kingdom 31 .8 

Bulgaria 15.3        Canada 18.0 

Denmark 46. 1        United  States 18. 1 

France 19.6        British  India 11 .6 

Germany 30.8        Japan 20.2 

Hungary 18.3        Algeria 9.5 

Italy 14.4        Egypt 225.6 

Netherlands 35.5        Tunis 4.3 

Norway 24.7        Union  of  South  Africa *8.2 

Rumania 17.4        Argentina 10 . 0 

Russia  (in  Europe) 10.0        Chile 20. 1 

Serbia n5.6        Uruguay »10.0 

Spain 14 . 0        Australia 12. 2 

Sweden 28.5       New  Zealand 30.5 

^Three-year  average. 
*Four-year  average. 

In  a  moist  climate  grow  what  are  known  as  soft  wheats, 
while  a  dry  and  severe  climate  favors  hard  wheats.  Russia 
appears  to  have  been  the  original  home  of  hard  wheat. 
From  there  it  was  introduced  into  the  plains  region  of 
North  America  where  its  suitableness  for  the  climate  is 
rapidly  winning  it  first  place  in  popularity.  These  sec- 
tions constitute  the  two  great  hard  wheat  areas  of  the 
world.  There  is  a  difference  in  milling  qualities  of  hard 
and  soft  wheats,  but  as  American  millers  have  become 
accustomed  to  handling  the  new  varieties,  hard  wheats 
have  tended  to  command  a  price  equal  to  or  somewhat 
higher  than  that  of  soft  wheats,  as  they  were  accustomed 
to  do  in  Russia. 

Wheat  is  not  at  present  raised  extensively  where  the 


WHEAT  231 

growing  season  is  less  than  ninety  days  in  length.  Severe 
winters,  which  are  usually  accompanied  by  a  short  growing 
season,  make  it  impossible  to  raise  fall-sown  wheat,  and 
extension  of  wheat  raising  into  such  areas  depends  upon 
the  success  of  spring-sown  varieties.  The  chief  spring 
wheat  areas  of  the  world  are  in  southern  and  eastern 
Russia,  the  northern  part  of  the  United  States,  and  Can- 
ada, corresponding  to  the  northern  parts  of  the  hard  wheat 
areas.  The  development  of  hard  spring  wheat  varieties 
has  made  it  possible  to  extend  into  higher  latitudes  the 
area  of  wheat  territory,  and  in  Canada  wheat  has  been 
grown  at  Fort  Simpson,  eight  hundred  miles  north  of 
Winnipeg,  while  in  Alaska  wheat  has  matured  at  Fair- 
banks, only  two  degrees  from  the  Arctic  Circle.  The  pos- 
sibilities of  still  further  expansion  of  the  wheat  area,  and  of 
the  increase  of  yield  through  better  farming  methods  and 
improved  varieties,  give  promise  of  increasing  production 
to  meet  the  demand  of  a  growing  population. 

Hand  in  hand  with  improved  varieties  of  grain  and 
better  farming  methods  have  been  introduced  economies 
in  the  handling  of  wheat  and  a  more  careful  system  of 
grading.  No  longer  in  the  United  States  and  Canada, 
for  example,  is  any  great  proportion  of  wheat  handled  in 
bags.  From  the  farms  it  goes  to  country  elevators  where 
it  is  stored  in  bulk.  From  there  it  is  drawn  loose  into  cars 
for  shipment,  to  be  unloaded  into  a  terminal  elevator  for 
storage  or  into  the  hold  of  a  ship  for  transport,  or  sent 
direct  to  the  door  of  a  flour  mill.  Loading  and  unloading 
are  by  gravity  or  suction  and  the  wheat  is  transported 
from  place  to  place  by  means  of  belt  and  spiral  conveyors 
and  other  mechanical  devices.  Thus  is  eliminated  the 
expense  of  bags  and  the  cost  of  the  additional  manual 


232          SOME  GREAT  COMMODITIES 

labor  required  for  bagging  and  handling.  In  a  modern 
flour  mill,  likewise,  wheat  passes  through  all  stages  from 
grain  in  the  freight  car  to  flour  bagged  for  shipment  with- 
out human  intervention.  Only  here  and  there  throughout 
the  plant  are  men  watching  to  see  that  nothing  goes  wrong 
with  the  machinery.  The  harbor  of  Sydney,  Australia, 
has  recently  been  equipped  with  a  large  terminal  elevator 
and  improved  loading  apparatus,  and  the  first  bulk  ship- 
ment was  made  in  the  early  part  of  1921. 

With  bulk  handling  and  elevator  storage  of  grain  goes 
a  system  of  government  inspection  and  certification  in  the 
United  States  and  Canada  which  makes  it  possible  to  buy 
and  sell  wheat  by  grade,  on  terms  which  do  not  permit  the 
purchaser  to  go  back  of  the  government  certificate.  This 
method  has  not  been  followed  in  other  of  the  chief  export- 
ing countries.  Russian  grain  is  bought  from  a  sample 
sent  in  ahead  of  the  shipment.  On  Indian  wheat  allow- 
ance is  made  for  more  than  an  agreed  percentage  of  dirt 
and  Argentine  wheat  is  sold  on  the  basis  of  a  guaranteed 
natural  weight  per  bushel,  with  adjustment  for  divergence. 
In  Australia  a  sample  is  made  up  by  the  authorities  to 
represent  the  "Fair  Average  Quality'*  of  the  crop  and  this 
sample  is  used  as  a  basis  for  sales. 

The  Great  Lakes  are  an  important  American  highway 
for  transporting  wheat,  especially  from  the  hard  spring 
wheat  area  of  northern  United  States  and  southern  Canada. 
Thence  export  wheat  is  carried  across  New  York  by  way 
of  the  Erie  Canal  or  down  the  St.  Lawrence  River,  or  is 
shipped  to  the  coast  by  train.  Some  wheat  is  sent  down 
the  Mississippi  River,  but  at  present  the  greater  part  of 
the  crop  for  export  moves  eastward.  Much  of  the  Cana- 
dian crop  is  carried  east  by  train  but  some  of  it  passes  out 


WHEAT  233 

through  the  Pacific  ports  to  points  in  the  Orient,  or  via 
the  Panama  Canal  to  Europe.  The  opening  of  the  Canal 
has  given  considerable  impetus  to  the  use  of  the  western 
outlet  for  the  Canadian  crop. 

The  importance  of  wheat  in  international  economy  can 
scarcely  be  overemphasized.  Not  only  is  it  the  principal 
cereal  food  for  millions  of  people,  but  it  is  one  of  the  world's 
chief  ocean  cargoes,  affording  before  the  war  a  tonnage 
nearly  an  eighth  as  great  as  that  of  coal  and  four  times 
that  of  cotton.  It  flows  from  all  quarters  of  the  globe 
toward  Europe  and  helps  to  balance  demand  for  shipping 
by  furnishing  return  loads  for  homeward-bound  vessels. 
It  is  a  large  part  of  the  currency  in  which  the  great  agricul- 
tural regions  pay  for  manufactured  articles,  both  within 
and  without  national  boundaries.  Even  before  the  war 
wheat  and  wheat  flour  were  responsible  for  nearly  a  third 
of  the  total  value  of  Canadian  exports,  and  the  proportion 
in  Argentina  was  almost  as  great.  In  1920  wheat  repre- 
sented a  tenth  of  the  value  of  exports  from  the  United 
States.  Thus  the  banker,  the  manufacturer,  the  trader 
have  a  stake  in  wheat,  as  do  also  the  vast  body  of  pro- 
ducers of  wheat  and  consumers  of  bread,  and  it  is  not 
surprising  that  each  year  news  of  the  crop  is  eagerly 
watched,  and  that  the  "Wheat  Pit"  of  Chicago  and  the 
Corn  Exchange  of  London  are  close  to  the  center  of  busi- 
ness life. 


WOOL 

THE  world's  annual  wool  clip  has  not  varied  far 
from  3,000,000,000  pounds  during  the  last  ten 
years.  Although  in  terms  of  weight  this  is  only 
about  one-fourth  of  the  total  annual  cotton  crop,  it  is  a 
question  even  yet  as  to  whether  wool  is  not  the  most  im- 
portant raw  material  of  the  textile  industry  because  of 
the  great  durability  of  the  product  and  the  need  for  wool 
fabrics  in  those  colder  areas  of  the  world  where  modern 
civilization  centers.  The  chief  producing  countries  are 
those  which  have  much  pastoral  land,  the  clips  of  Australia 
and  Argentina  together  constituting  about  one-third  of 
the  total  world  supply.  The  highly  industrialized  coun- 
tries of  Europe  and  North  America  are  the  largest  con- 
sumers, although  wool  in  large  amounts  is  used  in  the 
domestic  industries  of  many  less  developed  countries. 

The  international  wool  market  is  perhaps  more  compli- 
cated than  is  that  for  any  other  raw  material.  The  sheep 
was  domesticated  in  many  different  parts  of  the  world 
before  the  beginning  of  history,  and  widely  divergent 
types  have  resulted.  Wool  may  be  a  major  product, 
with  mutton  as  a  minor  product,  or  sheep  may  be 
raised  primarily  for  mutton,  with  wool  reduced  to  the 
position  of  a  by-product.  Crossing  of  the  many  breeds 
of  sheep  with  the  object  of  securing  maximum  wool  clip, 
or  fine  early  lambs  and  superior  mutton,  or  some  combina- 
tion of  these  qualities,  has  resulted  in  bringing  into  exist- 

234 


WOOL  235 

ence  more  than  200  types  of  sheep,  each  producing  wool 
differing  more  or  less  from  the  others.  The  length  and 
fineness  of  the  fiber  also  differ  on  different  parts  of  the 
body  of  the  same  animal. 

Differences  in  quality  are  of  the  greatest  importance 
from  the  standpoint  of  the  wool  manufacturer.  As  a 
result,  more  than  640  different  grades  of  wool  are  recognized 
among  American  dealers,  while  for  Australia  alone  a  price 
list  for  848  separate  grades  was  at  one  time  drawn  up  in 
order  to  value  Australian  wool.  A  journal  well  known  in 
the  textile  industry  of  the  United  States  regularly  carries 
quotations  on  more  than  75  different  grades. 

The  remarkable  range  in  quality  in  the  raw  material, 
and  demand  for  specific  grades  in  order  to  assure  a  desired 
quality  in  the  fabric,  have  had  pronounced  effects  on  the 
character  of  the  wool  market,  both  in  the  wider,  interna- 
tional sense,  and  in  the  local  markets  of  the  producing 
and  consuming  countries.  The  range  of  prices  between 
the  grades  at  the  extremes  of  the  scale  is  such  that  the 
markets  for  these  wools  may  be  regarded  as  almost  inde- 
pendent of  each  other.  Results  of  this  complex  situation 
are  the  absence  of  future  trading  and  the  development  of 
varied  and  often  indirect  methods  of  marketing  and  financ- 
ing wool  from  the  producer  to  the  manufacturer. 

A  further  peculiarity  of  the  international  wool  market 
which  is  in  part  the  result  of  the  double  purpose  for  which 
sheep  are  raised,  and  which  in  part  results  from  other 
conditions  under  which  wool  is  produced,  is  the  failure  of 
supply  and  demand  to  adjust  to  each  other  promptly. 
Where  sheep  are  raised  primarily  for  mutton,  wool  con- 
tinues to  be  produced  as  a  by-product  as  long  as  there  is  a 
market  for  mutton  and  lambs.  A  large  proportion  of  the 


236          SOME  GREAT  COMMODITIES 

sheep  raised  primarily  for  wool  are  in  areas  of  the  world 
in  which  it  is  at  present  difficult  to  raise  any  other  animals 
or  crops  with  much  hope  of  profit.  It  takes  years  to  de- 
velop a  good  flock.  Hence,  flockmasters  in  these  countries 
cannot  at  once  lessen  production  in  the  face  of  a  falling 
wool  market.  Even  adverse  weather,  as  destructive  as 
it  has  been  at  times  to  flocks,  especially  those  of  Australia 
which  have  been  repeatedly  decimated  by  drouths,  has 
not  as  a  rule  greatly  affected  the  world's  wool  supply. 

Sheep  are  raised  in  many  countries.  Hence,  the  wool 
supply  as  between  different  years  is  well  equalized,  and 
even  shortage  of  special  grades  can  be  largely  met  in  case 
of  need  by  substitution.  Variations  in  the  price  of  wool 
over  any  ordinary  period  are,  therefore,  chiefly  deter- 
mined by  conditions  on  the  demand  side  of  the  equation, 
by  artificial  barriers  to  free  international  trade,  such  as 
tariffs  and  embargoes,  and  by  changes  in  the  general  price 
level.  The  United  States  is  both  a  producer  and  an  im- 
porter of  wool,  home  production  being  equivalent  to  only 
about  one-half  of  consumption  by  American  mills.  The 
domestic  clip  of  fine  wools  is  quite  inadequate  for  the  needs 
of  the  wool  manufacturers  of  the  United  States,  and  has 
been  difficult  of  expansion.  This  condition,  together  with 
an  uncertain  tariff  policy  through  many  years,  has  con- 
tributed to  the  unstable  and  artificial  character  of  the 
American  wool  market. 

TECHNICAL  CONSIDERATIONS 

Consideration  of  certain  practical  aspects  of  the  sheep 
industry,  together  with  some  technical  questions  concern- 
ing the  wool  fiber  itself,  in  relation  to  spinning  methods 
and  product,  are  requisite  for  general  understanding  of 


WOOL  237 

the  international  wool  market.  Wool  differs  from  hair  in 
essential  characteristics.  It  has  superior  spinning  quali- 
ties. Certain  fine  wools  are  superior  to  any  other  animal 
fiber  in  this  respect.  The  scales  or  serrations  on  the  wool 
fiber  give  wool  fabrics  felting  and  shrinking  properties  of 
great  value.  No  other  important  textile  raw  material 
has  these  qualities  in  any  comparable  degree.  Wool  is 
highly  elastic,  and  can  be  readily  dyed  in  fast  colors. 
Wool  fabrics  are  comparatively  impervious  to  cold  and 
absorb  moisture.  As  a  result  of  the  combination  of  these 
various  qualities,  they  combine  comfort,  desirable  appear- 
ance and  durability  to  a  degree  which  has  as  yet  never 
been  equaled  by  any  substitute. 

It  is  probable  that  sheep  were  valued  both  for  food  and 
for  wool  almost  from  the  first  stages  of  domestication. 
Until  the  development  of  refrigeration,  by  which  fresh 
mutton  and  lamb  can  be  conveyed  great  distances  by  rail 
and  ship  to  consuming  markets,  sheep  in  frontier  regions 
or  other  large  areas  of  unoccupied  land  were  usually  pro- 
duced primarily  for  wool,  while  those  in  thickly  settled 
countries  were  raised  primarily  for  food,  wool  being  a 
secondary  consideration.  Refrigeration  has  so  altered 
conditions  that  the  price  relation  has  become  well-nigh 
the  only  determining  factor  as  between  wool  and  mutton. 

From  the  standpoint  of  the  sheep-raising  industry,  the 
sheep  of  the  world  fall  into  four  broad  classes.  Least 
important  of  these  groups  are  the  so-called  "native" 
sheep,  the  various  unimproved  breeds  of  many  countries, 
all  of  which  produce  wool  of  grades  below  those  used  in 
the  modern  manufacture  of  clothing.  Such  wools  are 
usually  known  as  carpet  wools.  There  are  in  Asia  and 
southeastern  Europe  great  numbers  of  such  sheep,  many 


238          SOME  GREAT  COMMODITIES 

of  them  being  of  the  fat-tailed  varieties.  The  Karakul,  a 
sheep  of  central  Asia,  also  bearing  wool  of  the  carpet  type, 
produces  the  furs  known  as  Persian  lamb,  Astrakhan,  and 
Broadtail.  There  are  flocks  of  "native"  sheep  in  Iceland, 
the  fleeces  of  which  have  special  value  where  a  high  luster 
is  desired.  The  "native  "  sheep  of  other  parts  of  the  world 
have  not  infrequently  served  as  the  foundation  on  which 
modern  flocks  have  been  built,  some  of  these  breeds  having 
qualities  of  special  value.  It  is  true  in  a  general  sense, 
however,  that  except  as  suppliers  of  carpet  wool,  all  these 
"native"  sheep  have  practically  no  importance  from  the 
standpoint  of  the  international  market,  although  they 
are  of  great  value  as  sources  of  clothing  materials  and 
food  for  the  semi-nomadic  inhabitants  of  the  countries 
where  they  are  raised.  The  hair  of  the  Angora  goat, 
known  commercially  as  mohair,  and  the  hair  of  the  alpaca, 
vicuna  and  camel  have  uses  similar  to  those  of  wool,  but 
they  differ  in  essential  qualities,  are  used  only  for  special 
purposes,  and  the  quantities  produced  are  small. 

The  flocks  of  western  Europe,  North  and  South  Amer- 
ica, South  Africa,  Australia  and  New  Zealand,  which 
furnish  the  world's  supply  of  wool  suitable  for  the  manu- 
facture of  fabrics  for  clothing,  and  of  mutton  and  lamb 
for  food,  fall  into  three  classes,  the  result  of  centuries  of 
careful  breeding  and  selection :  those  sheep  bred  primarily 
for  wool,  those  in  the  production  of  which  mutton  is  the 
prime  object,  and  crossbreds,  the  result  of  various  meth- 
ods of  crossing  the  two  fundamental  types. 

The  basis  of  all  the  flocks  of  the  world  which  are  main- 
tained primarily  for  wool  is  the  Spanish  merino,  the  term 
"merino"  and  "wool  type"  having  become  almost  synony- 
mous. The  merino  was  developed  in  Spain  centuries 


WOOL  239 

ago,  and  from  it  special  types  have  been  developed  in 
several  countries.  As  compared  with  the  mutton  breeds, 
merinos  are  small,  hardy,  slow-growing,  long-lived,  and 
suitable  for  handling  under  range  conditions.  Although 
some  breeds  of  merinos  are  good  mutton  sheep,  in  general 
the  type  lacks  the  evenness  of  line,  fullness  of  outline, 
tendency  toward  early  maturity,  and  disposition  to  lay 
on  external  fat,  which  are  the  essential  qualities  where  pro- 
duction of  mutton  and  lamb  is  the  primary  object. 

Types  of  merinos  have  been  developed  of  which  20  per 
cent,  of  the  weight  of  the  live  sheep  is  wool,  and  for  which 
30  pounds  is  not  an  uncommon  weight  in  the  grease  for 
the  fleece  of  a  single  ram.  Merino  wools  now  constitute 
between  one-fourth  and  one-third  of  the  world's  supply. 
They  are  characterized  by  their  softness  and  fineness,  these 
qualities  being  combined  with  strength  and  elasticity. 
They  are  a  necessity  for  the  manufacture  of  the  finest 
woolen  and  worsted  yarns.  The  length  of  staple  varies 
somewhat  among  the  various  merinos,  but  practically 
all  are  included  in  a  range  of  from  if  to  3  inches.  Merino 
wools  in  the  natural  state  are  loaded  with  grease,  some 
varieties  scouring  out  as  much  as  75  per  cent.,  the  usual 
range  being  from  50  to  60  per  cent.  The  main  merino 
flocks  of  the  world  are  those  of  Australia,  the  United 
States  and  South  Africa,  although  a  number  of  European 
countries  produce  important  quantities  of  merino  wool. 
In  the  past  Uruguay  produced  considerable  merino  wool, 
but  is  becoming  predominantly  a  crossbred  wool  country. 

The  ideal  mutton  sheep  must  have  a  deep,  wide,  sym- 
metrical body,  set  on  short  legs.  This  conformation  en- 
ables the  butcher  to  cut  the  carcass  to  the  best  advantage, 
with  little  waste,  and  furnishes  the  highest  percentage 


240          SOME  GREAT  COMMODITIES 

of  desirable  cuts.  Consumption  of  mutton  is  declining  in 
relation  to  the  consumption  of  lambs.  From  70  to  80 
per  cent,  of  the  sheep  which  now  reach  the  market  are  less 
than  a  year  old,  and  this  tendency  has  made  rapid  growth 
of  lambs  a  requisite.  It  is  also  important  not  to  neglect 
the  shearing  qualities  of  mutton  sheep,  as  the  wool  is  a 
valuable  product  of  any  flock,  but  breeding  skill  has 
been  definitely  concentrated  on  the  question  of  meat  pro- 
duction. 

There  are  many  breeds  of  mutton  sheep,  but  all  of  them, 
with  the  exception  of  the  Tunis  sheep,  which  is  of  little 
numerical  importance,  depend  for  their  mutton  qualities 
on  the  characteristics  of  the  British  breeds,  of  which 
38  are  recognized.  These  have  always  been  bred  pri- 
marily for  mutton,  quantity,  quality  and  character  of 
wool  being  only  a  secondary  consideration.  The  British 
breeds  originated  from  two  general  types,  hence  may  be 
grouped  into  two  main  divisions.  The  long-wool  breeds 
are  characterized  by  great  size,  slow  maturity  and  a  ten- 
dency to  coarseness  of  flesh,  and  by  heavy  yields  of  long 
wool,  tending  to  coarseness.  Wools  of  this  type  are  known 
to  manufacturers  as  luster  or  semi-  or  demi-luster  wools. 
They  are  poor  as  to  felting  qualities  and  are  used  in  the 
making  of  braids  or  of  dress  goods  when  luster  is  desired. 
Representative  breeds  of  long-wool  British  sheep  are  the 
Lincoln,  which  grows  a  wool  from  8  inches  up  to  15  inches 
in  length,  unwashed  fleeces  averaging  from  14  to  18 
pounds,  and  Cotswold,  with  fleeces  ranging  from  10  to 
15  inches  in  length  and  weighing  from  15  to  18  pounds. 
The  long-wool  breeds  originated  in  low  fertile  lands,  and 
are  best  fitted  for  such  an  environment. 

The  other  group  of  British  breeds,  known  as  medium- 


WOOL  241 

wool  sheep,  are  generally  smaller  than  the  long-wool  type, 
and  were  developed  on  rolling  downs,  hills  and  thinner 
soils.  According  to  character  of  wool,  they  are  divided 
into  the  "down"  and  the  "mountain. "  The  down  breeds 
are  noted  for  their  fine  mutton  qualities,  and  they  furnish 
the  bulk  of  British  medium  wools.  Down  wools  range  in 
length  from  i  to  5  inches.  These  wools  are  finer  and  softer 
than  are  those  of  the  long-wool  breeds,  and  they  possess 
strength,  elasticity  and  good  felting  properties.  The 
down  breeds  are  now  popular  in  the  chief  mutton-  and 
lamb-producing  countries  and  are  the  leading  type  of 
England.  The  more  important  breeds  are  the  South- 
downs,  with  unwashed  fleeces  ranging  from  5  to  8  pounds 
in  weight;  Shropshires,  the  fleeces  of  which  range  from  8  to 
10  pounds  in  weight;  Oxfords,  with  fleeces  of  from  10  to 
12  pounds,  and  Hampshires,  which  yield  on  the  average 
about  8  pounds  of  unwashed  wool.  Of  the  "mountain" 
breeds  of  mutton  sheep,  only  the  Cheviot  is  well  known. 
Wools  of  this  class  are  not  important. 

The  development  of  crossbreeding  between  the  various 
merinos  and  the  mutton  breeds  by  the  application  of 
modern  principles  has  shown  conclusively  that  it  is  possi- 
ble to  secure  good  wool,  as  well  as  superior  mutton  and 
lambs,  from  the  same  flock.  As  a  result  of  this  develop- 
ment, the  world's  clip  of  crossbred  wools  now  exceeds 
the  production  of  merino  wool. 

No  domestic  animal  has  proved  more  adaptable  to  vary- 
ing conditions  as  to  climate  and  food  supply  than  the 
sheep,  which  can  be  raised  successfully  either  on  lush 
pasture  or  on  what  is  practically  a  desert,  at  sea  level  or 
almost  to  the  limit  of  vegetation  on  mountains.  This 
adaptability  has  determined  the  three  main  methods  by 


242          SOME  GREAT  COMMODITIES 

which  sheep  are  now  raised:  (i)  under  farm  conditions, 
i.  e.,  when  land-holdings  are  fairly  small  and  where  sheep 
are  raised  in  connection  with  general  farming  of  various 
types;  (2)  the  paddock  system,  in  which  sheep  are  allowed 
to  run  practically  at  will,  within  large  fenced  areas;  and 
(3)  on  ranges.  This  latter  method  is  adapted  to  the  fron- 
tier, where  there  are  large  areas  of  unoccupied  land. 
Under  range  conditions  sheep  can  be  handled  in  large 
flocks  by  herders.  Where  sheep  are  raised  under  farm 
conditions,  mutton  and  lamb  are  usually  the  major  prod- 
uct, and  sheep  of  the  distinctive  mutton  types  prevail, 
although  there  are  important  exceptions.  Wool  is  usually 
more  important  than  mutton  and  lamb  where  sheep  are 
raised  on  ranges  or  in  paddocks,  and  merinos  or  merino 
crossbreds  are  preferred,  both  because  of  the  quality  of 
their  wool  and  their  excellent  herding  qualities. 

As  the  frontier  regions  of  the  world  are  gradually  settled, 
there  is  an  inevitable  tendency  away  from  range  methods, 
first  toward  the  paddock  system  and  then  to  farm  condi- 
tions. It  has  been  well  demonstrated  that  except  under 
very  unusual  circumstances,  from  the  standpoint  of  profit, 
sheep  raised  under  farm  conditions  for  wool  exclusively 
cannot  compete  with  other  farm  animals  and  crops. 
Where  there  is  a  large  consistent  demand  for  superior 
mutton  and  lamb,  sheep  may  be  found  very  profitable 
in  highly  developed  agricultural  countries,  as  evidenced 
by  the  fact  that  in  the  United  Kingdom,  which  has  an 
area  of  121,000  square  miles,  the  number  of  sheep  was 
officially  estimated  in  1921  as  24,000,000  with  a  clip  of 
100,000,000  pounds.  American  consumption  of  mutton 
and  lamb,  though  increasing,  is  as  yet  limited,  and  in  the 
same  year,  this  country,  with  an  area  of  3,000,000  square 


WOOL  243 

miles,  had  but  36,000,000  sheep,  with  an  estimated  clip 
of  273,000,000  pounds. 

In  practically  all  countries  except  those  of  western 
Europe,  there  are  large  areas  which  are  unsuited  by  reason 
of  climate  or  other  conditions  for  the  more  intensive  forms 
of  agriculture,  and  in  such  regions  sheep  will  continue  to 
be  raised  profitably  for  wool  as  the  major  product.  It  is 
nevertheless  true  that,  considering  the  world's  sheep  in- 
dustry as  a  whole,  the  mutton  types  and  crossbreds  are 
gaining  on  the  merinos.  Thus,  in  New  Zealand,  pure 
merinos  now  constitute  less  than  one-fifth  of  the  pure-bred 
stock  of  the  Islands,  and  only  4  per  cent,  of  all  sheep. 
Merinos  have  been  practically  displaced  by  crossbreds  in 
Argentina,  this  process  is  under  way  in  Uruguay,  and  fine 
wool  sheep  have  long  been  of  negligible  importance  in 
Europe,  at  least  outside  of  Spain.  In  the  United  States 
the  tendency  is  toward  crossbreeding,  except  in  a  few 
localities.  Although  merino  wool  constitutes  more  than 
half  of  the  total  Australian  clip,  even  there  the  merino 
appears  to  be  losing  ground.  The  only  important  wool- 
growing  country  where  merinos  are  now  the  dominant 
type  is  the  Union  of  South  Africa,  where,  according  to  the 
latest  information  available,  72  per  cent,  of  the  total 
number  of  sheep  are  merinos. 

Wool  manufacturers  of  those  countries  in  which  the 
making  of  high-grade  fabrics  is  important  have  viewed  the 
drift  away  from  merinos  with  great  anxiety.  At  the  same 
time,  if  the  demand  for  fabrics  of  those  classes  for  which 
merino  wools  are  essential  is  sufficient  to  maintain  a  price 
differential  between  them  and  other  grades  which  will 
make  the  production  of  merino  wools  profitable,  there  is  no 
doubt  that  their  production  will  be  expanded  to  meet  it. 


244          SOME  GREAT  COMMODITIES 

MARKET  TERMS 

As  wool  reaches  the  market,  it  varies  widely  as  to  con- 
dition both  as  a  result  of  the  relative  care  or  lack  of  care 
with  which  sheep  and  clip  have  been  handled,  and  as  a 
result  of  differing  market  customs.  The  wools  of  Aus- 
tralia and  New  Zealand  are  perhaps  the  superior  of  all 
others  as  regards  care  and  skill  in  preparation  for  the 
market.  Not  only  are  they  carefully  sheared,  but  they  are 
"skirted"  by  the  removal  of  the  poorer  parts  of  the  fleece. 

As  it  comes  from  the  sheep's  back,  wool  contains  much 
natural  grease  and  some  other  foreign  matter.  In  this 
condition,  it  is  said  to  be  "in  the  grease."  The  process  of 
removal  of  this  extraneous  material  is  known  as  "scour- 
ing," and  wool  which  has  passed  through  the  process  is 
described  as  "scoured  wool."  Loss  in  weight  during 
scouring  is  called  "shrinkage,"  which  varies  from  20  to 
80  per  cent.,  the  heaviest  loss  being  as  a  rule  in  the  fanciest 
merino  wools.  On  a  basis  of  shrinkage,  say,  of  50  per 
cent.,  100  pounds  of  wool  in  the  grease  would  yield  only 
50  pounds  of  clean  wool.  Shrinkage  varies,  not  only  be- 
tween different  breeds  of  sheep  and  between  countries, 
but  even  in  the  same  flock  from  year  to  year,  so  that  com- 
parisons as  to  quantities  and  as  to  prices,  if  on  a  grease 
basis,  are  only  the  roughest  approximations  of  facts,  al- 
though it  is  often  necessary  to  use  such  data  for  lack  of 
better. 

The  two  main  divisions  of  the  wool  manufacture  are  the 
woolen  and  worsted  industries,  in  which  two  quite  distinc- 
tive methods  of  manufacture  are  used.  In  the  woolen 
system,  the  wool  is  carded,  by  which  is  meant  that  prior 
to  spinning,  the  fibers,  while  separated  to  a  certain  extent, 


WOOL  245 

are  left  crisscrossed,  lying  in  no  general  order.     In  this 
condition,  they  are  spun  directly  on  the  mule. 

In  the  worsted  industry,  the  fibers  are  first  carded  and 
then  combed.  Combing  produces  a  continuous  strand 
of  long,  parallel  fibers  known  as  "top"  from  which  the 
inferior  fibers,  those  which  are  short,  weak  or  tangled,  are 
separated,  being  known  as  "noil."  "Top"  is  spun  into 
worsted  yarn.  "Noil"  is  a  raw  material  of  the  woolen 
industry.  In  the  United  Kingdom  top-making  is  usually 
carried  on  by  manufacturers  who  are  not  makers  of  yarns 
or  cloth,  but  this  is  not  so  customary  in  the  United  States. 
"Tops"  and  "noils"  are  regularly  quoted  on  many  mar- 
kets. 

GRADES  OF  WOOL 

The  tariff  schedule  of  the  United  States  classifies  wools 
as  clothing  or  carding  wools,  combing  wools,  and  carpet 
wools.  In  the  trade,  wools  suitable  for  the  manufacture 
of  fabrics  are  separated  into  three  main  classes :  clothing 
or  carding  wools,  which  are  short  wools  suitable  for  woolen 
manufacture;  French  or  baby  combing  wools  of  interme- 
diate length,  of  which  grades  J  blood  and  above  are  suit- 
able for  manufacture  on  the  French  system,  and  grades  f 
and  below  ordinarily  are  used  on  the  worsted  system  for 
knitting  and  weft  yarns;  and  combing  wools,  suitable  for 
manufacture  on  the  worsted  system  for  weaving  and  warp 
yarns. 

Grade  names  are  further  complicated  by  the  use  of 
different  systems  of  classification  in  various  countries, 
and  by  variations  in  usage  even  in  different  parts  of  the 
same  country.  There  are  special  classes  of  wools  which 
fall  outside  the  main  systems  of  wool  classification  in  use, 


246          SOME  GREAT  COMMODITIES 

the  largest  group  being  carpet  wools.  As  heretofore 
noted,  they  come  mostly  from  the  countries  of  Asia  and 
southeastern  Europe,  being  grown  on  "native  sheep." 
They  are  coarse  and  otherwise  inferior,  and  by  no  means 
all  grades  are  suitable  for  the  manufacture  of  high-grade 
carpets  and  rugs.  There  is  no  hard  and  fast  line  between 
carpet  wools  and  other  grades,  however.  When  the  prices 
of  other  wools  are  very  high,  the  better  carpet  wools  may 
be  used  to  mix  with  them  in  the  manufacture  of  blankets, 
coarse  overcoatings,  and  similar  fabrics.  On  the  other 
hand,  much  carpet  wool  comes  from  the  inferior  parts  of 
the  fleeces  of  other  than  the  so-called  "native"  sheep, 
while  another  source  of  supply  is  "pulled  wool,"  that  is, 
wool  from  the  skins  of  slaughtered  sheep.  Carpet  wools 
are  usually  designated  in  market  quotations  by  country 
of  origin,  and  various  descriptive  terms.  They  are  usually 
graded  as  coarse,  common,  medium  and  good. 

There  are  two  systems  of  classification  of  those  grades 
of  wool  used  in  the  manufacture  of  worsted  fabrics  for 
clothing  which  may  be  said  to  be  widely  used :  the  Brad- 
ford system,  and  the  American  or  "Boston"  classification. 

The  Bradford  or  foreign  topmakers'  system  for  classify- 
ing wool  assumes  that  wool  is  of  the  same  quality  as  the 
finest  count  of'yarn  to  which  it  can  be  commercially  spun. 

The  yarn  unit  is  a  hank  consisting  of  560  yards.  If 
this  hank  weighs  one  pound,  the  yarn  is  "one  count." 
If  it  takes  two  hanks  to  weigh  one  pound,  the  yarn  is 
"two  count."  Wool  that  at  its  highest  spin  would  make 
"one  count  yarn"  or  "two  count  yarn"  would  be  desig- 
nated as  "ones"  and  "twos"  respectively,  although  as  a 
matter  of  practice,  yarns  of  such  low  counts  are  never  made. 
If  it  takes  50  hanks  of  yarn  to  make  a  pound,  the  yarn 


WOOL  247 

would  be  "fifties  count  yarn"  and  the  wool  that  at  its 
highest  spin  would  make  "fifties  count  yarn"  would  be 
designated  as  "fifties  quality  wool."  Thus  the  finer  the 
yarn  which  can  be  made  from  wool,  the  higher  the  "count" 
of  the  yarn  and  the  higher  the  "quality"  of  the  wool  that 
is  suitable  for  making  this  yarn. 

As  a  matter  of  fact,  these  designations  are  only  approxi- 
mate. Climatic  conditions  vary  the  count  of  yarn  that 
can  be  spun  from  wool  of  a  given  quality. 

The  Bradford  system  originated  at  Bradford,  England, 
but  is  now  used  in  Australia,  New  Zealand,  and  at  least  to 
some  extent  in  South  America,  South  Africa,  and  on  the 
Continent. 

The  "Boston  system"  is  chiefly  in  use  in  the  United 
States,  although  a  similar  system  is  used  in  Canada,  and 
a  related  terminology  is  also  sometimes  applied  to  South 
American  wools.  Originally  the  American  wool  market 
graded  its  wools  on  the  so-called  "  blood  classification, "  i.  e., 
according  to  the  proportion  of  merino  blood  in  the  sheep 
producing  the  fleece.  Although  the  significance  of  this 
terminology  has  now  been  lost,  such  terms  as  "f  blood" 
referring  not  to  proportion  of  merino  blood  but  to  the  fine- 
ness of  the  wool,  the  terms  themselves  persist.  Unfortu- 
nately, there  are  variations  even  in  the  terms  applied  to 
wools  produced  in  different  parts  of  the  United  States. 
Thus  the  wools  of  the  eastern  states,  that  is,  those  of  the 
Ohio  Valley,  Michigan,  New  York,  Wisconsin,  Missouri, 
and  New  England,  are  designated  as  "domestic,"  while 
those  of  the  Dakotas,  Montana,  Nevada,  Utah,  Colorado, 
Idaho,  Wyoming,  New  Mexico,  Arizona  and  eastern 
Oregon  are  known  as  "territory."  There  are  special 
classes  for  Texas,  California  and  western  Oregon. 


248 


SOME  GREAT  COMMODITIES 


There  are  many  other  distinctions  between  grades  than 
length  and  fineness  of  staple.  Thus  "pulled  wool,"  that 
taken  from  the  pelts  of  slaughtered  sheep,  differs  in  es- 
sential ways  from  the  wool  sheared  from  the  living  animal. 
The  first  fleece  clipped  from  a  sheep  differs  from  later 
fleeces  from  the  same  animal,  and  is  designated  in  the 
British  market  as  hog,  hogget,  or  teg  wool.  In  localities 
such  as  Texas,  where  sheep  are  often  sheared  twice  a  year, 
the  number  of  months'  growth  becomes  a  designation,  while 
color,  breed  and  an  infinite  variety  of  conditions  may  be 
embraced  in  grade  terminology. 

It  is  thus  clear  that  any  attempts  to  present  parallel 
grades  by  the  different  systems  can  give  only  the  most 
general  idea  of  the  relation  between  them.  Nevertheless, 
Table  A,  showing  equivalents  of  some  of  the  leading 
grades,  may  be  of  value  in  an  understanding  of  current 
market  quotations.  It  must  be  clearly  understood,  how- 
ever, that  these  grades  are  equivalent  only  in  a  general 
way,  and  especially  that  the  counts  spun  in  England  from 
wools  graded  according  to  the  Bradford  system  are  higher 
than  the  counts  spun  from  the  corresponding  grades  in 
the  United  States. 


TABLE  A— EQUIVALENT  GRADES  OF  WOOL  AS  CLASSIFIED  ACCORDING  TO 
THE  BOSTON  AND  BRADFORD  SYSTEMS 


Domestic 

Full  blood  (XX).... 
I  blood  (X)  

BOSTON  SYSTEM 

Territory            Pulled 

Fine                     AA 
Fine  medium       AA 
|  blood                A 
f  blood                B 
i  blood                B 
Low  |  blood        C 
Common             C 
Braid                  C 

BRADF( 

Foreign 

66s  to  74s 
64s 
60s 
56s  to  58s 
50s  to  56s 
46s 
40s  to  44s 
32s  to  40s 

L  blood.. 

I  blood 

i  blood  

x>w  ^  blood 

Common. 

Braid.. 

Counts 


s  spun 
U.S. 


60s  and  lower 

50s 

40s 

36s 

32s 

20s 

16s 

16s 


WOOL  249 

The  United  States  Department  of  Agriculture  is  now 
endeavoring  to  assist  wool  growers  in  standardizing  wool 
grades  in  this  country.  Especially  is  it  desired  to  establish 
definite  physical  standards,  thereby  eliminating  to  a  large 
extent  differences  in  grading  which  result  from  differences 
in  judgment  as  between  graders.  A  standard  working 
set  has  been  prepared  and  has  been  actually  used  for  the 
grading  of  wool  in  Missouri,  Virginia,  and  Texas,  as  well 
as  in  a  number  of  other  states.  Grades  as  at  present 
established  are  to  be  regarded  as  tentative,  and  their  adop- 
tion is  purely  voluntary,  whether  by  state  authorities, 
local  wool  marketing  associations  or  dealers.  It  is  be- 
lieved that  their  use  will  widen.  The  government  classi- 
fication at  present  is  as  follows: 

Fine  clothing  Low  J  blood  baby  combing 

Fine  French  combing  Low  J  blood  strictly  combing 

Fine  strictly  combing  Common 

^  blood  clothing  Braid 

J  blood  French  combing  Burry,  seedy  and  chaffy 

|  blood  strictly  combing  Cotted 

f  blood  clothing  Dead  and  merrin 

f  blood  baby  combing  Kempy 

f  blood  strictly  combing  Damaged 

J  blood  clothing  Black  and  gray 

J  blood  baby  combing  Pieces 

J  blood  strictly  combing  Tags 

Low  J  blood  clothing 

DISTRIBUTION  OF  SHEEP  IN  THE  WORLD 

Exact  data  as  to  the  number  of  sheep  and  the  annual 
wool  clip  of  the  world  are  not  available,  even  for  those 


250          SOME  GREAT  COMMODITIES 

countries  in  which  agricultural  statistics  are  most  highly 
developed,  while  estimates  in  use  as  to  both  sheep  and 
wool  for  many  countries  can  hardly  be  called  more  than 
guesses.  Moreover,  production  data  and  figures  for  ex- 
ports and  imports  usually  fail  to  distinguish  between 
scoured  wool  and  wool  in  the  grease,  so  that  all  that  can 
be  done  is  to  accept  totals,  regardless  of  the  fact  that  they 
may  contain  widely  varying  proportions  of  scoured  wool 
and  of  wool  in  a  greasy  condition.  Satisfactory  data  for 
a  number  of  countries,  especially  those  of  southeastern 
Europe,  have  not  been  available  since  the  war,  and 
changed  boundary  lines  have  further  complicated  the 
problem  of  comparability. 

The  best  information,  however,  comes  from  the  main 
consuming  and  producing  countries,  while  most  of  those 
areas  for  which  only  the  most  uncertain  data  are  available 
play  little  part  in  the  international  market,  except  for 
carpet  wool.  Such  data  as  can  be  had  are  therefore  of 

TABLE  B— NUMBER  OF  SHEEP  IN  THE  WORLD,  BY  PRINCIPAL  COUNTRIES, 
FOR  THE  LATEST  AVAILABLE  DATES 

[Compiled  from  National  Association  of  Wool  Manufacturers  Annual  Review,  1921,  and 
published  data  of  United  States  Department  of  Agriculture] 

/->  VM,  Number  of  sheep 

Country  Year  (in  thousands) 

North  America 

United  States— continental 1921  136,048 

Canada 1921  3,676 

Other  countries 1,010 

Total 40,734 

South  America 

Argentina 1921  37,000 

Brazil                                                1921  12,000 

Chile  .'. '         1918  4,434 

Uruguay 1916  11,473 

Other  countries 11.830 

Total. .  76,737 


WOOL 


251 


rnw  Vwr  Number  of  sheep 

Country  Year  (in  thousand8) 

Europe 

Bulgaria 1921  8,500 

Czechoslovakia 1921  976 

Denmark,  inc.  Iceland  and  Faroe  Islands. . .  1920  21,192 

Finland 1920  800 

France 1920  9,406 

Germany 1920  6,139 

Greece 1918  5,468 

Hungary 1921  1,284 

Italy 1921  12,000 

Jugoslavia 1921  6,836 

Norway...               1918  1,208 

Poland 1919  2,300 

Roumania 1921  8,662 

Russia  in  Europe 1916  363,833 

Spain..  1921  20,522 

Sweden 1919  1,564 

United  Kingdom 1921  24,161 

Other  countries 411,149 

Total *186,000 

Asia 

British  India 191S-20  21,984 

Russia  in  Asia 1915  34,468 

Turkey  in  Asia 1912  27,095 

China 1921  25,880 

Other  countries 5,512 

Total 114,939 

Africa 

Algeria 1914  9,140 

Union  of  South  Africa 1921  34,573 

Other  countries 26,287 

Total 70,000 

Oceania 

Australia  and  Tasmania 1920  72,767 

New  Zealand 1921  23,285 

Total  Australasia  (approximately) 96,052 

Other  countries 10 

Total 96,062 

Grand  total— World 584,472 

»United  States  Census  figure. 
"Iceland  and  Faroe  Islands  year  1919. 
•Goats  included. 
«No  estimate  for  Turkey  in  Europe. 


252          SOME  GREAT  COMMODITIES 

more  value  than  might  appear,  in  determining  the  situa- 
tion as  to  the  world's  supply  of,  and  demand  for,  wool  for 
the  manufacture  of  clothing. 

It  will  be  readily  understood  that  because  of  diversity 
of  breeds,  the  wool  clip  of  a  country  is  not  necessarily 
commensurate  with  the  number  of  sheep.  Thus,  the  wool 
produced  in  the  countries  of  southeastern  Europe  and  of 
Asia  is  not  only  practically  all  of  the  carpet  grades,  but  the 
quantity  is  small  in  relation  to  the  estimated  number  of 
sheep,  while  the  clip  of  such  countries  as  Australia,  New 
Zealand,  and  South  Africa,  where  sheep-breeding  is  carried 
on  with  great  skill,  is  heavy  in  relation  to  the  reported 
number  of  animals. 

Table  B  shows  the  estimated  number  of  sheep  in  the 
more  important  countries,  for  the  latest  year  for  which 
data  are  available,  as  well  as  estimates  by  grand  divisions 
and  for  the  world  as  a  whole. 

The  relatively  large  numbers  of  sheep  reported  in  Euro- 
pean and  Asiatic  Russia  and  Asiatic  Turkey  are  chiefly 
significant  as  indicating  the  extent  to  which  climate  and 
vegetation  of  these  areas  favor  the  pastoral  industries. 
Whenever  the  need  for  new  sources  of  wool  supplies  be- 
comes great  enough,  the  wool  clip  of  these  countries  can  be 
tremendously  increased,  but  such  gains  would  mean  the 
gradual  encroachment  of  modern  methods  upon  the  semi- 
nomadic  lives  of  the  inhabitants. 

THE  WORLD'S  WOOL  SUPPLY 

In  1921  the  wool  clips  of  Australia,  New  Zealand,  Argen- 
tina, the  United  States,  the  Union  of  South  Africa,  Spain, 
Uruguay,  and  the  United  Kingdom  amounted  to  nearly 
2,000,000,000  pounds  out  of  a  total  world  clip  of  less  than 


WOOL  253 

3,000,000,000  pounds.  The  wool  production  of  these 
eight  countries  constituted  a  much  higher  proportion  of 
wools  suitable  for  clothing.  Average  annual  production  for 
Australia  and  New  Zealand  together  is  about  800,000,000 
pounds  of  wool.  The  entire  product,  with  the  exception  of 
a  certain  proportion  of  waste  from  the  inferior  parts  of 
fleeces,  is  suitable  for  the  manufacture  of  clothing  fabrics. 
The  countries  next  in  importance  as  wool  producers  are  the 
United  States  and  Argentina,  each  producing  not  far  from 
300,000,000  pounds  per  year.  Almost  the  entire  clip  of 
Australia,  New  Zealand  and  Argentina  passes  into  inter- 
national trade,  while  exports  of  wool  from  the  United 
States  are  negligible.  The  annual  clip  of  the  Union  of 
South  Africa  varies  considerably,  but  has  probably  aver- 
aged not  far  from  1 50,000,000  pounds  during  the  last  ten 
years.  Practically  the  entire  clip  is  available  for  ex- 
port. Spanish  wool  production,  which  underwent  re- 
markable expansion  during  the  war,  was  about  142,- 
000,000  pounds  in  1920,  and  a  large  part  of  the  clip 
was  exported  to  neighboring  European  countries.  In 
1921  the  Spanish  clip  was  165,000,000  pounds.  Uruguay 
and  the  United  Kingdom  each  produce  about  100,- 
000,000  pounds  of  wool  annually.  A  large  part  of 
Uruguayan  wool  is  merino,  and  practically  all  of  it  is 
exported.  The  wool  grown  in  the  United  Kingdom  is 
chiefly  from  mutton  breeds  and  is  used  at  home. 

Table  C  shows  wool  production  by  countries.  Figures 
are  for  1921  for  those  countries  for  which  data  are  available 
for  that  year.  For  some  other  countries  production  for 
1920  is  shown.  In  a  few  cases,  only  estimates  are  to  be 
had. 


254          SOME  GREAT  COMMODITIES 

TABLE  C— WORLD  PRODUCTION  OF  WOOL  IN  1921  BY  COUNTRIESI 


Country 

North  America 

United  States 

British  North  America 

Mexico 

Other  countries 

Total 

South  America 

Argentina 

Brazil 

Chile 

Peru 

Falkland  Islands 

Uruguay 

Other  countries 

Total 

Europe 

Austria 

Belgium 

Bulgaria 

Czechoslovakia 

Denmark,  Iceland  and  Faroe  Islands  .  . 

Finland 

France 

Germany 

Greece 

Hungary 

Italy 

Netherlands 

Norway 

Poland 

Portugal 

Roumania 

Russia 

Spain 

Sweden 

Switzerland 

Turkey 

United  Kingdom 

Jugoslavia 

Total. . 


1921 
(in  thousands  of  pounds) 

273,064 

24,050 

500 

750 

298,364 


300,000 

60,000 

26,000 

12,000 

3,200 

110,000 

5,861 

517,061 


1,840 

1,226 

17,637 

4,294 

3,508 

3,250 

39,600 

42,975 

16,000 

11,023 

58,000 

5,500 

4,409 

6,724 

6,245 

38,192 

150,000 

165,347 

4,720 

800 

2 

100,000 
26,372 

707,662 


WOOL  255 


Country  1921 

(in  thousands  of  pounds) 

Asia 

British  India 60,000 

China 50,000 

Persia 12,146 

Russia  in  Asia 45,000 

Turkey  in  Asia 90,000 

Other  countries 2,854 

Total 260,000 

Africa 

Algeria 33,184 

British  South  Africa 120,000 

Tunis 3,735 

Other  countries 12,505 

Total 169,424 

Oceania 

Australia  and  Tasmania 536,542 

New  Zealand 181,480 

Australasia 718,022 

Other  countries 70 

Total 718,092 

Grand  total 2,670,603 

^Computed  on  a  greasy  basis. 
•Not  available. 


WOOL  CONSUMPTION 

Since  wool  production  is  seasonal,  and  since  distance 
and  other  factors  mean  that  a  considerable  time  must 
elapse  between  the  clipping  of  the  fleece  from  the  sheep's 
back  and  the  first  stages  of  manufacture,  stocks  of  wool 
in  the  international  sense  are  heavy  at  all  times,  although 
they  may  vary  considerably  with  the  seasons,  and  widely 
as  between  different  years.  Over  a  series  of  years,  how- 
ever, it  is  obvious  that  the  world's  wool  production  and 
consumption  must  be  in  approximate  balance.  Normal, 
or  average,  world  consumption  since  1900  may  therefore 


256          SOME  GREAT  COMMODITIES 

be  considered  as  about  3,cxx),ooo,ooo  pounds  of  wool  a 
year. 

From  the  standpoint  of  the  wool  market,  a  distinction 
must  be  made  between  those  countries  where  woolens 
are  woven  by  primitive  methods  for  household  use,  largely 
in  the  homes  of  the  people,  and  those  countries  which  use 
large-scale  factory  methods.  The  wool  consumption  of 
such  countries  as  British  India,  Asiatic  Russia,  Asiatic 
Turkey,  and  China  is  primarily  for  household  industry. 
Rugs  and  carpets  made  from  the  native  wools  of  these 
regions  are  important  in  international  trade,  and  domestic 
consumption  is  at  all  times  a  factor  in  determining  the 
amount  of  carpet  wool  which  will  be  available  for  export, 
but  such  countries  are  not  at  present  potential  wool  im- 
porters. Countries  in  which  the  wool  textile  industry 
is  as  yet  little  developed,  and  whose  wool  production  is 
very  large  in  relation  to  population,  as  Australia  and 
Argentina,  are  chiefly  factors  on  the  supply  side. 

Demand  in  the  international  sense  is  determined  primar- 
ily by  conditions  affecting  the  woolen  and  worsted  in- 
dustries of  the  United  Kingdom,  the  other  countries  of 
northwestern  Europe,  including  European  Russia,  and  the 
United  States.  Stocks  of  wool  in  these  countries  are  con- 
siderable at  all  times,  but  over  a  series  of  years  commercial 
consumption  of  new  wool  may  be  measured  by  domestic 
production,  plus  imports,  less  exports.  It  is  to  be  clearly 
understood  that  actual  consumption  by  the  inhabitants 
of  a  country  may  be  quite  different  from  commercial 
consumption.  To  determine  actual  consumption,  account 
would  have  to  be  taken  of  the  wool  content  of  all  exports 
and  imports  of  wool  manufactures,  and  this  cannot  be 
accurately  done  on  the  basis  of  existing  statistics  of  foreign 


WOOL  257 

trade.  Throughout  this  discussion,  the  term  "consump- 
tion" has  reference  only  to  consumption  in  the  commercial 
sense. 

The  presence  of  tops  and  yarn  in  considerable  quantity 
in  the  foreign  trade  of  some  countries  is  a  complicating 
factor  in  any  attempt  to  determine  the  amount  of  wool 
which  is  actually  consumed  in  the  manufacture  of  wool 
fabrics.  Wool  for  top-making  and  wool  spun  into  yarn 
is  included  in  the  apparent  wool  consumption  of  any 
country,  as  determined  by  domestic  production  plus  net 
imports  of  raw  wool.  From  the  standpoint  of  cloth  manu- 
facture, wool  consumption  of  a  country  which  is  a  net  im- 
porter of  tops  or  yarn  should  be  increased  by  the  amount 
of  raw  wool  required  to  make  them,  while  from  the  stand- 
point of  countries  which  are  net  exporters  of  tops  or  yarn, 
wool  consumption  for  cloth  manufacture  should  be  cor- 
respondingly reduced.  Existing  data  do  not  permit  of 
the  making  of  such  corrections  for  foreign  trade  in  tops 
and  yarns,  however. 

The  war  so  greatly  disturbed  conditions  in  many  im- 
portant wool-using  countries  that  pre-war  figures  are  per- 
haps a  better  indication  of  potential  consumption  than  are 
data  for  the  war  years  or  since  1918.  At  the  same  time, 
it  is  to  be  remembered  that  in  some  important  consuming 
countries  there  has  been  a  sufficient  increase  in  population 
to  suggest  permanently  higher  requirements.  In  others, 
some  expansion  in  the  capacity  of  wool-using  industries 
occurred.  On  the  other  hand,  there  has  been  serious  dis- 
organization of  the  wool  textile  industry  in  many  Euro- 
pean countries,  due  to  change  of  boundaries  and  unsettled 
political  conditions,  while  shortage  of  raw  wool,  inability 
to  buy  it  in  pre-war  quantities  because  of  disadvantageous 


258          SOME  GREAT  COMMODITIES 

exchange,  and  above  all,  the  impoverishment  of  the  ul- 
timate consumers  of  fabrics  made  of  wool,  have  tended 
to  curtail  manufacturing  activities.  There  are  no  grounds 
to  justify  the  conclusion  that  the  pre-war  status  will  re- 
turn. With  these  reservations,  Table  D,  showing  esti- 
mated commercial  consumption  of  wool  in  the  thirteen 
chief  wool-using  countries  from  1909  to  1913  may  be  of 
value. 

These  countries  are  supplied  from  an  equally  small 
group  of  countries.  Table  D  also  shows  for  the  same  pre- 
war period  net  wool  exports  from  the  twelve  countries 
which  furnish  most  of  the  wool  for  the  international 
market.  Although  transportation  was  greatly  dis- 
turbed from  1914  to  1918,  the  war  made  no  changes 
likely  to  prove  permanent  in  conditions  surrounding 
wool  production  in  the  exporting  countries  included  in  the 
table. 

Prior  to  1914,  the  United  Kingdom,  France,  the  United 
States,  Germany,  Russia,  Austria-Hungary,  and  Belgium, 
in  the  order  named,  were  the  leading  wool-consuming 
countries.  Total  average  annual  consumption  for  the 
group  was  about  2,7oo,ocx>,ooo  pounds,  as  compared  with 
an  estimated  average  world  production  for  the  five  years 
before  the  war  of  2,900,000,000  pounds. 

The  war  exerted  widely  varying  effects  on  the  woolen 
and  worsted  industries  of  these  countries.  The  French 
industry  fell  almost  entirely  within  the  devastated  area. 
Belgium  was  occupied  and  both  Belgium  and  Germany 
were  cut  off  from  their  customary  sources  of  imported 
raw  materials,  as  were  also  Austria-Hungary  and  Russia. 
During  the  latter  part  of  the  war,  the  British  industry 
was  handicapped  by  lack  of  labor,  and  restricted  its  prod' 


WOOL  259 

TABLE  D— COMMERCIAL  CONSUMPTION  OF  WOOL  BY  PRINCIPAL 
CONSUMING  COUNTRIES  FROM  1909  TO  1913 


Country 


Production 


1909-13  (5-yr.  aver.) 

Net  Net  Available  for 

Imports  Exports  consumption 
(in  thousands  of  pounds) 
Exporting 

Algeria 35,221  .  17,554  17,667 

Argentina 328,204  .  327,990  214 

Australia  and  Tasmania...  728,198  .  676,378  51,820 

British  India 53,631  .  32,775  20,856 

Chile 17,430  .  *  * 

China 50,000  .  42,684  7,316 

New  Zealand 192,147  .  190,231  1,916 

Persia 10,023  .  8,056  1,967 

Peru 9,333  .  9,155  178 

Spain 52,000  .  26,059  25,941 

Uruguay 139,178  .  139,178 

Union  of  South  Africa 164,651  .  164,651 

Importing 

Austria-Hungary 41,600  63,942  .  105,542 

Belgium 1,060  103,927  .  104,987 

Canada 11,000  6,471  .  17,471 

France 80,688  516,655  .  597,343 

Germany 25,600  439,171  .  464,771 

Japan 13  10,223  .  10,236 

Netherlands 3,556  5,629  .  9,185 

Norway 8,160  3,521  .  11,681 

Russia 210,892  73,778  .  284,670 

Sweden 6,060  7,118  .  13,178 

Switzerland 1,049  10,873  .  11,922 

United  Kingdom 136,021  508,904  .  644,925 

United  States 313,648  203,289  .  516,937 

»Not  available  for  sheep's  wool  separately.    Total  exports  including  hair  of  the  vicuna 
and  mohair  were  27,533,000  pounds. 


uct  primarily  to  those  classes  of  fabrics  required  for  mili- 
tary purposes.  Wear  and  tear  on  machinery  was  great, 
and  it  is  doubtful  whether  the  physical  productive  capacity 
of  the  woolen  and  worsted  manufacture  of  the  United 
Kingdom  more  than  held  its  own. 

The  war  was  a  powerful  stimulus  to  the  industry  of  the 
United  States.  Imports  of  wool  manufactures  were  in 
large  measure  cut  off,  and  domestic  prosperity  resulted  in 


260          SOME  GREAT  COMMODITIES 

an  active  demand  for  fabrics.     In  addition,  in  1915  and 

1916,  American  mills  were  in  receipt  of  large  orders  from 
some  of  the  Entente  countries  for  uniforms  and  other 
military  supplies  requiring  wool  fabrics.     Beginning  with 

1917,  the  woolen  and  worsted  industry  of  the  United 
States  operated  under  intense  pressure,  until  the  Armistice, 
to  provide  for  the  army. 

The  close  of  the  war  found  both  the  United  States  and 
the  United  Kingdom  badly  overstocked  with  raw  wool, 
which  had  been  accumulated  to  provide  for  military  re- 
quirements for  a  war  the  duration  of  which  could  not  be 
foreseen.  Large  amounts  of  wool  had  accumulated  in  the 
chief  producing  countries  because  of  disorganization  of 
ocean  transportation,  and  because  of  the  elimination  from 
the  market  of  a  group  of  consuming  countries  whose 
annual  imports  of  wool  had  averaged  nearly  1,200,000,000 
pounds  just  before  the  war.  It  was  expected  that  post-war 
demand  for  woolen  and  worsted  goods  at  home  and  abroad 
would  enable  the  United  States  and  the  United  Kingdom 
to  utilize  their  accumulated  wool  advantageously,  and 
that  those  countries  which  had  long  been  cut  off  from  sup- 
plies would  absorb  the  overstocks  of  wool  accumulated  in 
producing  countries. 

Such  did  not  prove  to  be  the  case.  The  amount  re- 
tained for  consumption  during  and  since  the  war  cannot, 
therefore,  be  accepted  as  a  measure  of  actual  consumption. 
In  Table  E,  production  of  wool  and  net  exports  or  im- 
ports are  shown  as  far  as  available  for  the  years  1919, 
1920  and  1921  for  those  countries  whose  position  in  rela- 
tion to  the  international  wool  market  from  1909  to  1913 
was  shown  in  Table  D.  No  attempt  has  been  made  to 
arrive  at  a  consumption  figure. 


WOOL 


261 


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262          SOME  GREAT  COMMODITIES 

WOOL  CONSUMPTION  IN  THE  UNITED  STATES  AND  THE 
UNITED  KINGDOM 

Prior  to  1914,  the  woolen  and  worsted  industry  of  the 
United  Kingdom  was  the  foremost  of  the  world,  not  only 
from  the  standpoint  of  reputation  for  quality,  but  from 
the  standpoint  of  wool  consumed,  physical  equipment, 
and  the  number  of  persons  employed  in  the  industry. 
Table  D  shows  that  the  average  amount  of  wool  available 
for  consumption  during  the  five-year  period  1909  to  1913 
in  the  United  Kingdom  was  644,925,000  pounds,  while 
the  corresponding  average  for  the  United  States  was 
516,937,000  pounds.  Various  estimates  of  consumption 
have  been  made  during  the  war  and  post-war  years  for 
both  countries.  Comparisons  are  only  of  limited  value, 
however,  because  of  confusion  as  to  whether  all  or  part  of 
the  reported  consumption  is  on  a  clean  basis  and  no  official 
data  are  available  for  the  United  Kingdom.  Table  F 
shows  consumption  in  the  United  States  from  1914  to  date. 
It  is  clear  from  the  table  that  American  mill  consumption 
when  operation  is  at  capacity  is  a  good  deal  higher  than 
the  average  for  the  five  years  immediately  preceding  the 
war. 

TABLE  F— WOOL  CONSUMPTION  IN  THE  UNITED  STATES,  1914  TO  1921 l 

Year  Pounds 

(in  thousands) 

1914..  502,857 

1915..  615,914 

1916 725,391 

1917   .  768,272 

19181..  741,719 

1919 626,885 

1920 578,838 

1921 . .  650,273 


^Figures  for  1914  to  1917  inclusive  represent  wool  in  condition  in  which  purchased;  figures 
for  1918  to  1921  have  been  reduced  to  a  grease  basis. 


WOOL 


263 


Consumption  of  wool  in  the  United  States  by  classes  and 
by  grades,  from  1918  to  1921,  is  shown  in  Table  G. 

TABLE  G — CONSUMPTION  OF  WOOL  IN  THE  UNITED  STATES  BY  GENERAL 
CLASSES,  1918  TO  1921. 

Quantity  Per  cent,  of  total  consumption 

Class  and  grade                  1918       1919         1920        1921  1918      1919  1920  1921 

(in  thousands  of  pounds) 
Fine 

Domestic 72,584  108,024     72,716     78,817  9 . 79     17 . 23  12 . 56  12.12 

Foreign 79,168  101,727    92,417    54,750  10.67     16.23  15.97  8.42 

Total 151,752209,751165,133133,567  20.46    33.46  28.53  20.54 

One-half  blood 

Domestic 67,132    69,724    52,910    64,166  9.05     11.12  9.14  9.87 

Foreign 46,697     42,000    35,056     18,740  6.30      6.70  6.06  2.88 

Total 113,829111,724    87,966    82,906  15.35     17.82  15.20  12.75 

Three-eighths  blood 

Domestic 74,912    69,190    63,512     71,891  10.10     11.04  10.97  11.06 

Foreign 52,229    35,280    37,642    28,101  7.04       5.62  6.50  4.32 

Total 127,141104,470101,154    99,992  17.14     16.66  17.47  15.38 

One-fourth  blood 

Domestic 67,535     51,016     49,522    69,798  9.10       8.14  8.56  10.73 

Foreign 182,488     53,847    62,824     61,711  24.60       8.59  10.85  9.49 

Total 250,023104,863112,346131,509  33.70     16.73  19.41  20.22 

Low  or  Lincoln 

Domestic 8,190      4,006      4,589      5,712  1.10         .64  .79  .87 

Foreign 44,749     19,705     15,108     11,095  6.04      3.14  2.61  1.71 

Total 52,939    23,711     19,697     16,807  7.14      3.78  3.40  2.58 

Carpet,  foreign 41,965    68,182    74,616    65,001  5.66    10.88  12.89  10.00 

Grade  not  stated 

Domestic 2,790      2,691       8,045    68,763  .38         .43  1.39  10.58 

Foreign 1,280       1,493      9,881     51,728  .17         .24  1.71  7.95 

Total 4,070      4,184     17,926120,491  .55         .67  3.10  18.53 

Total 

Domestic 293,143  304,651  251,294  359,147  39.52    48.60  43.41  55.23 

Foreign 448,576  322,234  327,544  291,126  60.48    51.40  56.59  44.77 

Grand  total 741,719  626,885  578,838  650,273  100.00  100.00    100.00  100.00 

Crease  basis:  pulled  and  scoured  wool  reduced  to  grease  equivalent. 


The  relative  importance  of  the  industries  of  the  United 
States  and  the  United  Kingdom  may  be  compared  on 
the  basis  of  equipment  for  spinning  and  weaving,  and 
the  number  of  persons  employed  in  the  industry.  Data 
for  the  woolen  and  worsted  equipment  of  both  countries 
are  shown  in  Table  H.  It  was  estimated  that  about  73 
per  cent,  of  the  total  amount  of  wool  consumed  in  the 
United  Kingdom  in  1917  was  used  by  the  worsted  trade, 


264          SOME  GREAT  COMMODITIES 

while  in  the  United  States  in  1919,  consumption  in  worsted 
manufactures  represented  about  76  per  cent,  of  total 
consumption. 

TABLE  H— MACHINERY  EQUIPMENT  OF  WOOL  MANUFACTURING 
INDUSTRIES 

FOR  LATEST   YEARS   FOR   WHICH   STATISTICS   ARE    AVAILABLE  1 

Doubling  and 

r-«,,«t«,  v~».  No-  °f  Sets of  Combing  Spindles  Twisting 

Country  r     mills     cards   machines  Woolen    Worsted    Spindles   Looms 

United  States 1919»       850     7,075      2,294     2,019,5532,903,503      771,117     75,729 

United  Kingdom..  1918'  2,218  6,130  2,474  3,061,0853,609,5451,352,196120,900 
Germany ...  ...  ...  ... 

Bdgium. .........   1920       '.'.'.         '503         .'.'.          360,'l75     348J30       21659      6,826 


Argentina..           .  1920                    49,950 

Austria 1921          39        48,500      130,880 

Australia 1917          27        

Czechoslovakia .  . .  1920       1,596,000     450,000 


Italy 1918»       592     3,989          423        520,795      435,350      139784     19,178 


New  Zealand 1919          10 


1,156 
34',455 


34,000 


^Reference  Book  of  the  National  Association  of  Wool  Manufacturers. 

*Woolen  and  worsted  goods  industries  only. 

•Statistical  Report  of  Bradford  Chamber  of  Commerce — woolen  and  worsted  mills  only. 

The  number  of  persons  employed  in  an  industry  in  any 
country  is  not  necessarily  an  indication  of  its  size  in  com- 
parison with  the  same  industry  in  another  country,  as  a 
higher  average  of  skill  may  be  offset  by  the  use  of  better 
and  more  nearly  automatic  machinery,  while  the  relatively 
higher  speed  at  which  American  operatives  work  as  com- 
pared with  the  operatives  of  other  countries  is  also  a  factor. 
Comparison  from  this  viewpoint  is  nevertheless  of  interest. 
Approximately  285,000  persons  are  employed  in  the  Brit- 
ish industry.  In  1914,  the  American  industry  employed 
an  average  of  159,000  wage  earners,  and  166,787  operatives 
were  reported  by  the  United  States  census  of  1919. 

Apparently  the  productive  capacity  of  the  woolen  and 
worsted  industry  of  the  United  States  is  somewhat  below 
that  of  the  United  Kingdom.  Although  certain  classes 
of  British  fabrics  have  a  clearly  recognized  superiority, 


WOOL  265 

there  now  seems  to  be  no  intrinsic  reason  to  prevent  the 
development  of  a  domestic  industry  surpassing  that  of 
Great  Britain.  While  American  mills  meet  an  exceedingly 
severe  competition  in  foreign  markets,  the  domestic  mar- 
ket alone  can  absorb  a  gradually  expanding  output. 

PRESENT  SITUATION  IN  THE  WOOL  MANUFACTURE 
OF  FRANCE 

The  French  industry  is  primarily  engaged  in  the  manu- 
facture of  worsteds.  It  centers  in  the  towns  of  Roubaix 
and  Turcoing  in  the  Department  of  the  North.  The 
industry  is  also  of  considerable  importance  in  the 
departments  of  the  Marne,  the  Aisne,  the  Ardennes, 
and  Normandy,  while  Mazamet,  in  the  Department 
of  Tarn,  has  been  one  of  the  most  famous  wool- 
pulling  centers  of  the  world.  Before  the  war,  about 
175,000  persons  were  employed  in  the  woolen  and  worsted 
manufacture  of  France,  but  four-fifths  of  the  plants  were 
in  the  devastated  and  occupied  areas,  so  that  the  industry 
emerged  from  the  war  in  a  disorganized  condition. 

As  a  partial  offset  to  war  losses,  France  gained  the  in- 
dustry of  Alsace-Lorraine,  which  before  the  war  employed 
somewhat  less  than  25,000  persons.  In  a  physical  sense, 
the  French  industry  of  the  invaded  regions  has  been 
gradually  rehabilitated.  If  operated  at  capacity,  these 
regions  could  now  considerably  exceed  half  of  pre-war 
production.  However,  unsatisfactory  general  conditions, 
not  only  in  France  but  elsewhere,  have  delayed  a  return 
to  normal  activity.  The  United  States  Trade  Commis- 
sioner at  Paris  estimated  French  wool  consumption  in 
1920  as  360,000,000  pounds,  in  the  condition  in  which 
purchased.  Equivalent  on  scoured  basis  is  not  known. 


266          SOME  GREAT  COMMODITIES 

GERMAN   WOOL   CONSUMPTION 

Prior  to  1914,  the  German  wool  manufacture  was  fourth 
in  importance,  when  measured  by  wool  consumption,  as 
indicated  by  the  amount  retained  in  the  country.  The 
industry  is  distributed  throughout  Germany,  in  marked 
contrast  to  its  localization  in  the  United  States,  the  United 
Kingdom  and  France.  Prior  to  1914,  it  employed  a  little 
less  than  250,000  persons,  of  whom  some  25,000  were  in 
Alsace-Lorraine.  Aside  from  the  loss  of  that  portion  of 
the  industry,  the  German  woolen  and  worsted  manufac- 
ture was  not  much  affected  by  the  war  or  the  Peace  Treaty, 
but  it  had  been  practically  shut  off  from  raw  materials 
for  four  years.  The  decline  of  the  mark  has  put  Germany 
in  an  advantageous  position  for  the  export  of  wool  manu- 
factures, but  at  a  disadvantage  as  regards  the  purchase  of 
raw  materials.  However,  the  industry  has  been  very  ac- 
tive in  recent  months,  and  wool  consumption  for  1921  prob- 
ably reached  about  two-thirds  of  normal,  or  300,000,000 
pounds. 

OTHER   EUROPEAN   COUNTRIES 

The  other  important  wool-manufacturing  countries 
of  Europe,  prior  to  1914,  were  Belgium,  Austria-Hungary, 
and  Russia,  the  textile  industries  of  the  two  latter  coun- 
tries being  now  largely  transferred  to  Poland  and  Czecho- 
slovakia. Belgium  is  obliged  to  import  practically  all 
of  the  raw  materials  used,  of  which  about  one-third  is 
Australian  wool,  the  remainder  coming  chiefly  from  the 
River  Plate  and  South  Africa.  While  the  weaving  of 
woolens  and  worsteds  is  an  important  industry,  the  loca- 
tion of  Belgium  has  also  enabled  its  factories  to  do  work 


WOOL  267 

for  the  industries  of  other  countries.  Somewhat  less  than 
half  of  the  carded  yarn  produced  in  the  country  is  normally 
consumed  by  Belgian  weaving  establishments.  Prior 
to  the  war,  Germany  was  the  heaviest  buyer.  Yarn  is 
also  sent  to  France  and  Great  Britain,  although  some 
heavy  carded  yarn  is  imported  into  Belgium  from  the 
latter  country  for  the  manufacture  of  common  carpets 
and  hosiery.  There  is  also  much  equipment  in  Belgium 
for  sorting,  scouring,  carbonizing,  and  otherwise  condi- 
tioning wool,  which  is  put  through  these  plants  before 
further  transportation,  in  order  to  lessen  freight  charges. 
During  the  five  years  1909  to  1913,  exports  of  wool  from 
Belgium  were  about  two-thirds  of  total  imports  on  a 
straight  weight  basis,  making  no  allowance  for  the  fact 
that  a  much  higher  proportion  of  exports  than  of  imports 
was  undoubtedly  clean  wool.  Part  of  the  exports  repre- 
sent mere  transshipment,  however. 

The  center  of  the  Belgian  wool  manufacture  is  Verviers. 
While  the  machinery  was  somewhat  damaged  during  the 
period  of  occupation,  it  is  now  in  fair  condition  for  opera- 
tion. 

During  the  five  years  1909  to  1913,  net  wool  imports 
into  Austria-Hungary  were  about  64,000,000  pounds  per 
year.  At  least  75  per  cent,  of  the  wool  manufacture  of 
the  former  empire  was  located  in  the  territory  now  em- 
braced in  Czechoslovakia,  which  acquired  possession  of 
every  important  textile  center  of  the  old  empire  except 
Bialic-Biala,  which  went  to  Poland.  Czechoslovakian 
purchases  of  raw  wool  have  naturally  been  made  where 
they  were  made  before  the  war,  primarily  from  Australia, 
'South  Africa,  and  South  America.  Wool  consumption  in 
1920  was  unofficially  estimated  at  23,000,000  pounds. 


268          SOME  GREAT  COMMODITIES 

The  Russian  industry  centered  at  Lodz,  which  is  now 
in  Poland,  and  in  Moscow.  The  industry  consumed  a 
part  of  the  merino  wool  produced  in  Russia,  and  Russian 
net  imports  from  1909  to  1913  averaged  about  70,000,000 
pounds  per  year.  The  Russian  industry  also  consumed 
a  good  deal  of  coarse  native  wool  for  military  supplies 
and  for  peasant  use.  The  loss  of  the  industry  centering 
at  Lodz,  Warsaw  and  Kalisz,  and  complete  disorganization 
as  a  result  of  political  disturbances,  have  cut  production 
of  wool  fabrics  to  a  small  part  of  the  pre-war  factory  output. 
It  was  not  expected  that  production  in  1921  would  be 
more  than  one-fourth  of  the  needs  of  the  people.  It 
seems  probable,  however,  that  there  is  a  considerable 
production  of  hand-made  fabrics  in  the  homes  for  house- 
hold use. 

Lodz  is  the  center  of  the  Polish  industry.  As  to  size 
and  technical  equipment  the  mills  in  that  district  are 
among  the  best  on  the  Continent.  Wool  manufacturing 
is  also  important  at  Warsaw,  Kalisz,  and  Bialystock,  and  in 
Bielsk.  In  a  statement  ascribed  to  the  Polish  Ministry  of 
Industry  and  Commerce  it  was  estimated  that  before  the 
war  the  textile  industry  embraced  within  the  present 
boundaries  of  Poland  consumed  about  217,000,000  pounds 
of  wool  a  year,  largely  of  low  and  medium  grades.  Other 
sources  indicate  that  this  figure  is  too  high.  Lack  of 
raw  materials  and  financial  and  political  instability  have 
militated  against  the  rapid  resumption  of  manufacturing 
activity  in  Poland. 

JAPAN 

The  wool  manufacture  of  Japan  has  developed  very 
rapidly  in  the  last  ten  years.  Only  a  very  small  amount 


WOOL  269 

of  wool  is  produced  in  the  country,  so  that  for  practical 
purposes  imports  are  identical  with  consumption.  During 
the  five  years  1909  to  1913,  they  averaged  about  10,000,000 
pounds  annually.  In  1913,  however,  imports  of  raw  wool 
were  12,000,000  pounds,  in  1919,  51,000,000  pounds  and 
in  1920,  71,000,000  pounds.  In  addition,  about  4,000,000 
pounds  of  tops  are  ordinarily  imported.  Japanese  im- 
ports in  1920  proved  to  be  in  excess  of  demand,  because 
of  a  decline  in  exports  of  wool  manufactures  and  in  domes- 
tic buying  power,  and  in  1921  only  30,000,000  pounds 
were  imported. 

The  chief  Japanese  product  is  mousseline  de  laine,  a 
light  dress  goods  which  is  either  left  plain  or  printed  in 
oriental  designs.  This  fabric  requires  the  best  grades  of 
wool.  Second  in  importance  is  the  manufacture  of  wool 
materials  for  military  use.  For  these,  half  merino  and 
half  Chinese  wool  is  used.  Products  of  this  class  were 
reported  in  the  spring  of  1921  as  constituting  about  30 
per  cent,  of  the  total  output  of  the  industry.  On  the  basis 
of  grades  of  wool  used,  Japanese  production  at  that  date 
was  reported  as  divided  about  as  follows:  fine,  count  64 
and  above,  60  per  cent.;  medium,  counts  56  to  64,  30  per 
cent.,  and  other  grades,  10  per  cent. 

WOOL  MANUFACTURE  IN  OTHER  COUNTRIES 

The  war  stimulated  the  wool  manufacture  of  a  number 
of  countries  in  which  the  industry  had  previously  been 
little  developed,  and  it  seems  likely  that  these  gains  will 
be  held,  behind  the  barrier  of  protective  tariff  if  need  be, 
at  least  in  those  countries  able  to  supply  all,  or  part,  of 
their  raw  materials.  Significant  development  of  the 
woolen  and  worsted  industry  has  taken  place  in  Brazil, 


270          SOME  GREAT  COMMODITIES 

Argentina  and  Canada,  and  a  beginning  has  been  made 
in  Australia  and  New  Zealand.  Canada  has  exported 
important  amounts  of  wool  manufactures. 

This  tendency  toward  establishment  of  the  woolen  and 
worsted  industry  in  countries  heretofore  dependent  pri- 
marily on  imported  fabrics  is  a  perfectly  logical  step  in  the 
industrialization  of  those  countries.  Because  of  a  limited 
labor  supply,  the  growth  of  the  industry  will  undoubtedly 
be  slow,  but  it  is  not  inconceivable  that  in  the  course  of 

TABLE  I — WORLD  PRODUCTION  OF  WOOL,  1919 

Total        ^  Cr<**bHred     Carpet, 


Country  Fraction   Merino 


etc. 


English 
(in  millions  of  pounds) 
British  Empire 

Australia 653  457  196 

British  India 60  ...  ...            60 

Canada 15  ...  15 

Falkland  Islands 3  ...  3 

New  Zealand. ...  228  9  219 

South  Africa 100  97  ...              3 

United  Kingdom 118  ...  118 

Total 1077  563  551           ~63 

Principal  European  Countries 

Austria-Hungary 42  8  34 

France 50  10  40 

Germany 26  5  21 

Greece 16  ...  ...            16 

Italy 35  26  9 

Portugal 73  31 

Russia. .  .  320  20  ...          300 

Spain 52  25  25             2 

Turkey  and  the  Balkan  States 

Total KM  97  132          410 

South  America.  .  480  80  360            40 

United  States 314  157  157 

Other  countries 281  .^ 

Total 1,075  237  517          321 

Grand  total. .  2,891  897          1,200  794 


WOOL  271 

years  the  extreme  localization  which  now  characterizes 
the  woolen  and  worsted  industry  of  the  world  may  tend 
to  disappear. 

THE  WORLD'S  WOOL  SUPPLY  IN  RELATION  TO  GRADES 

Merino  wool,  which  constitutes  a  little  less  than  one- 
third  of  all  wool  produced  in  the  world,  is  essential  for  the 
production  of  many  of  the  finer  kinds  of  wool  fabrics. 
Two-thirds  of  the  merino  clip  of  the  world  is  produced 
within  the  British  Empire.  Table  I,  from  a  report  of 
the  United  States  Tariff  Commission  entitled  "The  Wool- 
Growing  Industry,"  issued  in  1921,  summarizes  the 
world's  wool  clip  for  1919,  according  to  broad  general 
classes.  The  data  are  necessarily  approximate  and  differ 
somewhat  from  statistics  compiled  from  other  sources,  but 
it  is  believed  that  the  table  indicates  in  a  general  way  the 
international  situation  as  to  the  main  classes  of  wool. 
Conditions  have  not  changed  materially  since  1919. 

DESTINATION   OF  WOOL   EXPORTS   FROM   CHIEF 
EXPORTING     COUNTRIES 

About  95  per  cent,  of  the  Australian  wool  clip  is  ex- 
ported. Before  the  war,  the  United  Kingdom  took  more 
than  one-third  of  the  total  and  the  Continent  about  three- 
fifths,  while  only  i  or  2  per  cent,  came  directly  to  the 
United  States.  However,  a  considerable  amount  of 
Australian  wool  reached  this  country  through  the  United 
Kingdom.  Exports  to  Italy  showed  a  marked  increase 
during  the  war,  but  Imperial  purchase,  the  blockade  and 
shortage  of  shipping  cut  off  Australian  shipments  to  other 
European  countries  to  such  an  extent  that  the  Continent 
did  not  receive  more  than  10  per  cent,  of  Australian  ex- 


272          SOME  GREAT  COMMODITIES 

ports.  Between  70  and  80  per  cent,  of  that  part  of  the 
clip  exported  went  to  the  United  Kingdom  during  that 
period,  and  the  United  States  received  loto  15  per  cent. 
It  is  not  yet  possible  to  determine  whether  or  not  the 
United  States  will  continue  to  be  a  more  important  factor 
in  the  direct  export  trade  from  Australia  than  before  the 
war. 

Prior  to  1914,  about  90  per  cent,  of  all  New  Zealand 
wool  went  to  the  United  Kingdom.  During  the  war, 
exports  to  the  United  Kingdom  decreased,  and  the  share 
sent  to  the  United  States  increased. 

As  in  the  case  of  Australia,  the  war  made  radical  changes 
in  the  South  African  wool  trade.  Before  the  war,  the 
United  Kingdom  took  more  than  half  the  clip,  and  British 
takings  reached  72  per  cent,  of  total  exports  in  1915.  They 
then  declined  sharply,  exports  to  the  United  States  amount- 
ing to  half  the  total  in  1917  and  1918,  while  Japan  took 
nearly  one-fourth.  Since  that  time,  however,  exports  to 
the  United  States  have  declined  in  relative  importance. 
Exports  to  Japan  have  also  declined  heavily. 

France  was  the  heaviest  buyer  of  Argentine  wool  prior 
to  1913,  and  Germany  was  second  in  importance,  but  in 
that  year  the  position  of  the  two  countries  was  reversed. 
Large  quantities  were  also  exported  to  Belgium,  the 
United  Kingdom  and  the  United  States.  In  1915,  the 
United  States  became  the  dominant  factor  in  the  Argen- 
tine market,  taking  about  half  of  total  exports,  and  this 
condition  continued  through  1918.  Unofficial  data  for 
1920  and  1921  indicate,  however,  that  American  pur- 
chases declined  heavily.  Belgium  was  the  heaviest  buyer 
in  1920,  taking  more  than  one-third  of  total  exports. 
Undoubtedly  Belgian  purchases  were  designed  in  large 


WOOL 


273 


23 


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274 


SOME  GREAT  COMMODITIES 


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WOOL 


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276 


SOME  GREAT  COMMODITIES 


part  for  reexport  to  other  Continental  countries.  In 
1921,  Belgian  purchases  fell  off  and  Germany  took  about 
one-third  of  total  exports. 

Tables  J,  K  and  L  show  distribution  of  exports  of  wool 
from  Australia,  South  Africa  and  Argentina  in  1913,  dur- 
ing the  war,  and  for  the  post-war  years  as  far  as  data  are 
available. 


SOURCES  OF  THE  RAW  WOOL  SUPPLY  OF  THE  UNITED  STATES 

In  the  years  immediately  preceding  1914,  the  woolen 
and  worsted  industry  of  the  United  States  consumed 
annually  about  500,000,000  pounds  of  wool  (in  condition 
in  which  purchased).  Domestic  wool  production  con- 
stituted about  three-fifths  of  the  total.  While  it  is  as  yet 
too  early  to  determine  what  part  of  the  expansion  in  wool 

TABLE  M— IMPORTS  OF  CLOTHING  WOOLS  INTO  THE  UNITED  STATES, 
1909  TO  1921,  BY  PRINCIPAL  COUNTRIES  OF  ORIGIN 


Country 

Belgium 

11909-13 
(5-yr.  aver.) 

1  471 

France  

184 

Germany     .       ... 

311 

Russia  in  Europe  
Turkey  in  Europe.  .  . 
United  Kingdom.  .  .  . 
Canada 

33,036 
149 

Argentina  

24,503 

Chile      

132 

Ecuador 

a 

Peru 

Uruguay  

3,592 

Australia 

18,581 

New  Zealand 

4463 

China  

1 

British  India.  .  . 

Persia 

Russia  in  Asia  
Turkey  in  Asia.  .  .  . 

'  22 

British  South  Africa  . 
Other  countries  

65 
33 

11914-18 
(5-yr.  aver.) 


»1918 


*1919       *1920        »1921 


(in  thousands  of  pounds) 


Total. 


86,544 


1,517 

1,319 

180 

2 

6 

23,205 

1,336 

111,096 

7,267 

283 

2,025 

16,523 

53,815 

5,240 

6,241 

43 

"  8 
6 

33,061 
3,543 


266,716         373,911     334,100     212,392     207,867 


204 

1,250 

543 

'  117 

379 

587 

378 

1 

445 

I'.isi 

180 

318 

27 

"39 

14,704 

28,968 

2l',406 

2,718 

12,067 

7,629 

3,089 

203,238 

118,854 

71,910 

68,198 

10,887 

11,959 

14,514 

8,107 

1,162 

176 

46 

3,900 
17,656 

2,273 
49,931 

884 
29,768 

'in 

29,173 

65,118 

46,035 

37,372 

42,410 

6,276 

14,234 

26 

8,342 

10,506 

8,529 

525 

8,455 

2 

66 

33 

3 

81 

77 

612 

141 

'"2 

51.064 

51,466 

17,296 

15,694 

1,147 

1,536 

764 

1,454 

iFiscal  years  ending  June  30. 

•Calendar  year. 

»Less  than  1,000  pounds. 


WOOL 


277 


consumption  which  took  place  during  the  war  years  will 
prove  permanent,  it  seems  a  fair  assumption  that  normal 
consumption  of  wool  by  American  mills  is  now  somewhat 
in  excess  of  600,000,000  pounds  a  year. 

The  domestic  clip  of  the  United  States  has  not  varied 
far  from  300,000,000  pounds  in  thirty-five  years,  so  that 
increased  consumption  must  be  taken  care  of  by  increased 
imports.  The  sources  of  the  foreign  wools  spun  and 
woven  in  American  mills  are  therefore  of  fundamental 
interest  from  the  standpoint  of  the  future  of  the  wool- 
manufacturing  industry.  The  tables  which  follow  show 
separately  for  the  three  classes  of  wools  as  reported  for 
tariff  purposes,  and  for  the  three  classes  combined,  average 
imports  of  wool  into  the  United  States  from  the  more 
important  countries,  for  the  five  fiscal  years  ending  June 

TABLE  N — IMPORTS  OF  COMBING  WOOLS  INTO  THE  UNITED  STATES,  1909 
TO  1921,  BY  PRINCIPAL  COUNTRIES  OF  ORIGIN 


Country 


Belgium. 
France. . 


Germany 

Russia  in  Europe 

Turkey  in  Europe 

United  Kingdom 

Canada 

Argentina 

Chile 

Ecuador 

Peru 

Uruguay 

Australia 

New  Zealand 

China 

British  India 

Persia 

Russia  in  Asia 

Turkey  in  Asia 

British  South  Africa 

Other  countries 


U909-13 
(5-yr.  aver.) 


9 

44 

762 

15,535 

1,008 

1,174 

i 

'836 

65 

8 

70 

1 


10 

8 

162 


Total. 


19,693 


J1914-18 
(5-yr.  aver.) 

(in  thousands  of  pounds) 


29 

129 

5,020 

6,174 

3,060 

31 

12 

206 

73 

124 

'419 
6 


73 
279 

15,639 


«1918   »1919   *1920   >1921 


:;; 

"9 

'33 

59 
6 

'60 
710 
2,357 
70 

1,632 
3,383 
651 
2,087 
637 

1,192 
3,063 
199 
1,347 
319 

216 
4,715 
115 
5,570 

1,312 
1,206 

1,109 
341 
32 

643 

1,249 
358 
2 

2,864 
27 

628 
631 
25 
962 
914 

4,753 
57 

253 

3,997 
71 

98 
92 
369 
143 

9'is 

143 

10,525  14,845  11,355  14,899 


'Fiscal  years  ending  June  30. 

'Calendar  year. 

»Less  than  1,000  pounds. 


278 


SOME  GREAT  COMMODITIES 


TABLE  O— IMPORTS  OF  CARPET  WOOLS  INTO  THE  UNITED  STATES,  1909 
TO  1921,  BY  PRINCIPAL  COUNTRIES  OF  ORIGIN 


Country 


Belgium 

France 

Germany 

Russia  in  Europe 

Turkey  in  Europe 

United  Kingdom 

Canada 

Argentina 

Chile 

Ecuador 

Peru 

Uruguay 

Australia 

New  Zealand 

China 

British  India 

Persia 

Russia  in  Asia 

Turkey  in  Asia 

British  South  Africa 

Other  countries 

Total.  . 


U909-13 
(5-yr.  aver.) 

U914-18 
(5-yr.  aver.) 

»1918 

»1919 

»1920 

»1921 

(in  thousands  of  pounds) 

167 

6 

176 

218 

3,474 

659 

'»  ' 

'378 

140 

1,275 

2,338 

662 

968 

13,520 

3,991 

'22 

'411 

324 

1,751 

540 

2,932 

2,3*9 

'iis 

24,915 

12,248 

... 

19,045 

6,380 

37,839 

6 

49 

» 

98 

60 

105 

4,179 

12,193 

15,068 

14,045 

1,765 

10,181 

60 

2,566 

8,197 

13,274 

3,716 

86 

269 

871 

408 

85 

1,578 

3,136 

1,541 

360 

"'4 

*80 

1,064 

1,026 

7,031 

488 

2,352 

... 

35 

... 

... 

... 

16 

33,282 

31,885 

31,198 

29,814 

11,763 

37,183 

4,191 

1,426 

10 

66 

366 

1,374 

956 

110 

511 

4,692 

2,360 

2,718 

I,'l29 

2,327 

10 

7,267 

1,584 

1,353 

2,810 

400 

137 

3,135 

4,442 

2,386 

674 

1,517 

4,083 

4,370 

2,604 

3,037 

2,087 

3,748 

105,098  80,730 

iFiscal  years  ending  June  30.  «Calendar  year. 


69,292    96,948    35,870    97,900 
*Less  than  1,000  pounds. 


TABLE  P— TOTAL  IMPORTS  OF  WOOL  INTO  THE  UNITED  STATES,  1909  TO 
1921,  BY  PRINCIPAL  COUNTRIES  OF  ORIGIN 


Country 


Belgium 

France 

Germany 

Russia  in  Europe 

Turkey  in  Europe.  . . 
United  Kingdom.  . . . 

Canada 

Argentina 

Chile 

Ecuador 

Peru 

Uruguay 

Australia 

New  Zealand 

China 

British  India 

Persia 

Russia  in  Asia 

Turkey  in  Asia 

British  South  Africa. 
Other  countries. . . 


U909-13 
(5-yr.  aver.) 

1,639 
3,658 
2,658 

13,564 
2,514 

73,486 
1,163 

29,856 
192 
t 

836 

3,737 

18,589 

4,533 

33,284 

4,191 

956 
4,692 
7,299 

210 
4,278 


Total 211,335 

^Fiscal  years  ending  June  30. 


11914-18          ,1Q1R        .1Q1Q 
(5-yr.  aver.) 

(in  thousands  of  pounds) 


»1920        »1921 


1,523 

204 

1,426 

820 

1,982 

'  117 

766 

760 

1,653 

842 

1 

1,419 

4,022 

"22 

1,562 

504 

675 

4,882 

3,568 

'329 

40,473 

"99 

37,132 

38.411 

63,960 

7,559 

3,428 

12,816 

7,888 

3,309 

126,349 

220,663 

134,986 

75,022 

83,949 

9,864 

19,154 

25,870 

18,549 

8,193 

564 

2,033 

584 

131 

3,809 

8,348 

4,923 

2,493 

*803 

17,660 

18,682 

57,303 

30,614 

32,156 

53,974 

65,118 

46,067 

37,374 

42,451 

5,240 

6,276 

14,234 

26 

9,304 

38,545 

42,910 

38,986 

15,152 

46,552 

1,475 

12 

132 

426 

1,374 

110 

511 

2,368 

2,799 

1,459 

3,037 

10 

1,590 

1,494 

2,902 

402 

36,269 

60,259 

57,849 

18,339 

18,126 

8,192 

3,808 

4,644 

2,994 

5,345 

363,085         453,728    445,893    259,617    320,666 
•Calendar  year.  *Less  than  1,000  pounds. 


WOOL  279 

30,  1909,  to  1913,  average  imports  for  the  five  fiscal  years 
1914  to  1918,  and  for  the  calendar  years  1918,  1919,  1920 
and  1921.  It  will  be  observed  that  imports  for  the  first 
six  months  of  1918  are  included  twice  in  these  tables. 
The  same  list  of  countries  is  shown  for  each  class  of  im- 
ports, in  order  to  facilitate  combination  into  the  table 
showing  total  wool  imports  of  all  classes. 

PRICES 

The  wool  market  was  violently  affected,  both  by  war 
conditions  and  post-war  speculation  Government  con- 
trol of  the  British  and  Australasian  clips  was  established 
at  a  fairly  early  stage  of  the  struggle,  and  the  Government 
of  the  United  States  established  an  effective  control  in 
the  domestic  wool  market  at  the  close  of  1917.  Formal 
price  fixing  began  on  May  I,  1918. 

The  effects  of  post-war  speculation  were  accentuated  by 
general  disorganization  in  the  international  wool  trade 
resulting  from  different  dates  of  decontrol  in  various  coun- 
tries; the  accumulations  of  wool  in  producing  countries 
as  a  result  of  the  cutting  off  of  nearly  all  the  Continent 
from  the  sources  of  supplies,  as  well  as  lack  of  shipping 
space;  the  disruption  of  exchanges,  and  some  other  factors. 

Wool  prices  always  vary  as  between  countries,  because 
of  tariffs,  transportation  charges  and  other  local  condi- 
tions, but  the  general  trend  is  of  necessity  fairly  uniform. 
While  prices  in  the  various  markets  have  differed  even 
more  than  usual  due  to  abnormal  conditions,  the  price  at 
the  American  seaboard  is  nevertheless  a  fair  picture  of  the 
course  of  events  in  the  international  wool  market  dur- 
ing recent  years.  Table  Q  shows  prices  of  two  grades  of 
domestic  wool  at  Boston  from  1913  to  June,  1922,  and 


280 


SOME  GREAT  COMMODITIES 


prices  of  a  number  of  representative  imported  and  domes- 
tic grades  at  the  Atlantic  seaboard  from  July,  1919,  to 
June,  1922.  All  prices  are  on  a  clean  basis. 


PRESENT    CONDITIONS    IN    THE    INTERNATIONAL    WOOL 
MARKET 

Australasian  Stocks. — Consideration  of  the  outstanding 
facts  as  to  international  supply  of  and  demand  for  wool 

TABLE  Q— PRICE  OF  RAW  WOOL  AT  THE  ATLANTIC  SEABOARD,  1913 

TO  JUNE,  1922 

[Prices  are  for  the  available  date  nearest  the  fifteenth  of  each  month.] 
PART   I 

CLEAN  BASIS  BOSTON  CLEAN  BASIS  BOSTON 

Ohio          Ohio  Ohio          Ohio 

Year  and  fine 

blood                  month  delaine        blood 

r  pound)  (dollars  per  pound) 


Year  and 
month 

fin 
dela 

(doll; 

1913 

January  
April  

.72 
.66 

July  

.58 

October  

.58 

1914 

January  

.56 

April  

.59 

July  

.68 

October  

.61 

1915 

January  

.66 

April  

.73 

October.'.'  .'  .'  .'  '. 

.73 
.72 

1916 

January  

.76 

April  

.85 

July  

.82 

October  

.86 

1917 

January  

1.10 

April  

1.30 

July  

1.75 

October  

1.85 

.54 
.46 
.42 
.40 

.39 

.42 
.47 
.47 

.52 
.62 
.66 
.62 

.66 
.68 
.71 
.73 

.85 
..01 
..29 


1.31 


1918 

January.  ..... 

1.85 

April  

1.85 

July  

1.85 

October  

1.85 

1919 

January  

1.65 

April  

1.75 

July  

2.02 

October  

1.98 

1920 

January  

2.30 

April  

2.35 

July  

1.74 

October  

1.30 

1921 

January  

1.05 

April  

.92 

July  

.83 

October  

.86 

1922 

January  

1.03 

February  

1.20 

March  

1.20 

April  

1.12 

May  

1.25 

June  

1.45 

1.33 
1.35 
1.32 
1.32 

1.08 

.93 

1.14 

1.10 


1.07 

L.10 

.79 

.60 

.45 

.45 
.40 
.44 

.54 
.70 
.66 
.62 
.68 
.76 


WOOL  281 

fi      88    9388    5838S 


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J|§£  8£  £883    8888    38888S 

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282          SOME  GREAT  COMMODITIES 

makes  it  obvious  that  an  accumulation  of  wool  in  the 
main  producing  countries  from  1914  to  1921  was  inevita- 
ble. Prior  to  1914,  annual  net  imports  of  wool  into 
Austria-Hungary,  Belgium,  France,  Germany  and  Russia 
averaged  about  1,202,000,000  pounds.  While  these  coun- 
tries undoubtedly  received  a  certain  amount  of  wool,  at 
least  during  the  earlier  war  years,  they  did  not  get  much. 
The  close  of  the  war  found  their  industries  disorganized 
and  their  currencies  depreciated,  so  that  while  they  have 
all  been  buying  wool  since  1918,  with  the  exception  of 
Belgium  their  imports  have  remained  below  pre-war 
amounts.  Meanwhile,  from  causes  inherent  in  the  wool- 
growing  industry,  already  discussed,  there  has  been  no 
marked  curtailment  of  production. 

The  main  accumulation  of  wool  was  in  the  United 
Kingdom  and  in  the  British  dominions.  Beginning  with 
November,  1916,  the  British  Government  arranged  to 
take  over  the  Australian  and  New  Zealand  clips,  and  con- 
tinued to  purchase  them  for  three  seasons  thereafter. 
Although  there  was  no  arrangement  for  taking  over  the 
entire  South  African  clip  of  any  year,  the  British  Govern- 
ment also  bought  large  quantities  of  wool  there.  The 
growers  had  been  paid  for  this  wool  but  this  did  not  alter 
the  situation  in  the  least,  as  far  as  stocks  were  concerned, 
the  net  result  being  that  on  June  30,  1920,  the  British 
Government  was  the  owner  of  2,905,544  bales.  Although 
exact  data  are  not  available  as  to  the  origin  of  wools  in- 
cluded in  this  total,  apparently  about  2,000,000  bales  were 
Australian,  800,000  bales  New  Zealand,  and  the  remainder 
South  African  and  other  wools.  It  was  clear  that  in  fair- 
ness to  the  British  Government  this  wool  would  have 
to  be  sold,  thus  bringing  it  into  competition  with  the 


WOOL  283 

current  clips,  and  it  was  arranged  that  any  profits  over  the 
original  purchase  price  should  be  divided  between  the 
British  Government  and  the  growers  in  equal  shares. 
Although  by  December  31,  1920,  these  stocks  had  been 
reduced  by  about  300,000  bales,  to  2,611,277  bales,  of 
which  all  but  2,329  bales  were  Australian  and  New  Zealand 
wools,  at  that  date  they  represented  nearly  one-third  of 
an  ordinary  annual  world  clip. 

In  disposing  of  this  wool,  it  was  necessary  to  take  ac- 
count of  current  clips.  On  June  30,  1921,  it  was  estimated 
that  including  government-owned  wools  and  the  Austra- 
lasian clips  of  1920-21  and  1921-22,  there  would  be 
available  to  the  market  a  total  of  5,950,000  bales.  It  was 
believed  that  if  this  enormous  quantity  of  wool,  amount- 
ing to  practically  two-thirds  of  a  year's  clip  for  the  entire 
world,  were  all  offered  on  a  free  market,  demoralization 
would  result.  To  handle  the  situation,  the  British- 
Australian  Wool  Realization  Association,  Ltd.,  popularly 
known  to  the  wool  trade  as  "Bawra,"  was  formed.  In 
an  effort  to  stabilize  the  market,  not  only  was  this  organ- 
ization authorized  to  handle  the  government-owned  wool, 
but  after  vain  efforts  to  stabilize  the  price  of  the  current 
clip  by  agreement  among  the  growers,  on  May  9,  1921,  the 
Commonwealth  Government  adopted  a  regulation  for- 
bidding the  exportation  of  wool  at  a  price  lower  than  a 
rate  of  8d  per  pound  for  greasy  wool.  This  regulation 
was  to  be  effective  for  six  months,  or  until  November, 
1921. 

On  July  31,  1921,  Sir  John  Higgins,  speaking  for 
"Bawra,"  outlined  the  situation  as  shown  below.  His 
estimates  of  the  1921-22  clip,  and  consequently  the  totals, 
have  been  revised  according  to  later  official  estimates: 


284          SOME  GREAT  COMMODITIES 

Bales 
"Bawra"  carryover  wools 

Australian 1,489,000 

New  Zealand 720,000 

Total 2,209,000 

Cape  and  other  wools 200,000 

Unsold  balance  of  1920-21  clip 

Australian 500,000 

New  Zealand 200,000 

Total 700,000 

Clip  of  1921-22  (estimated) 

Australian 1,900,000 

New  Zealand 520,000 


Total 2,420,000 


Grand  total 5,529,000 


Throughout  1921,  these  old  and  new  wools  were  persist- 
ently fed  to  the  market  through  auctions  in  Australia, 
New  Zealand,  London  and  Antwerp,  the  war  wools  being 
offered  chiefly  in  London  and  on  the  Continent.  On 
December  31,  1921,  "Bawra"  carryover  of  Australian  and 
New  Zealand  wools  amounted  to  1,810,000  bales,  a  reduc- 
tion of  about  800,000  bales  from  December  31, 1920,  and  of 
400,000  bales  from  July  31,  1921.  In  addition,  "Bawra" 
held  80,000  bales  of  South  African  wool.  Australasian 
estimates  of  stocks  of  Australian  and  New  Zealand  wools 
other  than  "Bawra"  stocks  are  not  available,  but  the 
United  States  Department  of  Agriculture  estimated  them 
at  about  600,000  bales  as  of  November  30,  1921.  Appar- 
ently, the  total  stocks  of  Australasian  wools  at  the  end  of 
1921,  including  "Bawra"  wools,  the  carryover  from  the 
clip  of  1920-21,  and  the  clip  of  1921-22  were  in  excess  of 
4,500,000  bales  or  1,500,000,000  pounds. 

Although  an  attempt  was  made  to  have  wool  control 
continued  at  the  expiration,  on  November  9,  1921,  of  the 


WOOL  285 

Commonwealth  regulation  forbidding  the  exportation  of 
greasy  wool  at  a  price  below  8d  per  pound,  this  was  not 
successful,  except  for  a  temporary  extension  to  Novem- 
ber 23.  On  that  date,  all  forms  of  wool  regulation  expired 
in  Australia,  so  that  the  Australian  wool  market  is  entirely 
free.  "Bawra"  stocks  continued  to  decline  rapidly  during 
the  first  six  months  of  1922,  being  1,291,000  bales  on  June 
30.  The  organization  will  apparently  continue  to  operate 
until  this  wool  is  finally  disposed  of. 

Australasian  Merinos  and  Crossbreds. — Notwithstanding 
an  active  demand  for  wool  throughout  the  latter  part  of 
1921,  Australasian  wool  stocks  are  still  very  heavy.  Both 
old  and  new  merinos  have  moved  well.  On  August  31, 
1919,  of  the  total  stocks  of  Australasian  wools  held  by  the 
British  Government,  1,202,023  bales,  or  46  per  cent.,  were 
merinos  (including  fine  comebacks).  On  June  30,  1922, 
" Bawra"  holdings  of  merinos  were  but  204,522  bales, 
or  16  per  cent,  of  total  "Bawra"  stocks,  and  the  organiza- 
tion expects  that  they  will  all  be  sold  by  the  close  of  1922. 
The  movement  of  new  wools  has  also  been  more  active 
in  the  merino  classifications  than  in  other  grades.  The 
accumulation  is  primarily  in  crossbreds.  "  Bawra  "  stocks 
of  crossbred  wools  on  June  30,  1922,  were  917,000  bales 
of  which  18,000  bales  were  South  African  wools. 

Stocks  in  Other  Producing  Countries. — Although  during 
1921  the  British  Government  was  compelled  to  purchase 
about  100,000  bales  of  the  1919-20  clip  of  South  Africa 
to  relieve  the  situation  there,  by  June,  1922,  the  supply  of 
fine  grades  in  that  country  was  practically  exhausted. 
Wool  stocks  at  the  central  markets  of  South  America  on 
January  1, 1922,  were  estimated  at  37,000,000  pounds,  com- 
pared with  about  40,000,000  pounds  on  the  corresponding 


286          SOME  GREAT  COMMODITIES 

date  of  1921.  However,  stocks  at  central  markets  are 
not  total  South  American  stocks,  which  may  even  yet  be 
above  normal,  although  much  reduced  from  high  levels. 
Stocks  in  Consuming  Countries. — According  to  the 
United  States  Department  of  Agriculture,  stocks  of  wool 
in  Great  Britain,  France,  and  Germany  are  small.  Stocks 
of  wool  in  the  United  States  at  the  close  of  1921,  while 
adequate,  were  certainly  not  heavy.  Table  R  summa- 
rizes government  returns  of  stocks,  reduced  to  grease 
equivalent,  at  the  close  of  each  year  from  1917  to  1920, 
and  on  September  30,  1921.  The  government  stocks  were 
entirely  disposed  of  in  March,  1922. 

TABLE  R — STOCKS  OF  WOOL  ON  HAND  HELD  BY  DEALERS, 
MANUFACTURERS,  AND  THE  GOVERNMENT  ON  DECEMBER  31, 1917,  TO  1921 

Estimated  equivalent  grease  wool 

Held  by 

December  31  Dealers  and  Govern-  Total 

manufacturers  ment 

(in  thousands  of  pounds) 

1917 544,977       *         ' 

1918 272,062       *         2 

1919 475,000     117,416     592,416 

1920 508,778      64,403     573,181 

1921'.. .  469,647      45,145     514,792 

'Not  reported. 

Total  supply  of  grease,  pulled  and  scoured  wool  estimated  at  460,000,000  Its. 

'Returns  for  September  30,  1921. 

THE  OUTLOOK 

Including  the  clip  of  the  Australasian  wool  year  1921-22, 
which  ends  on  June  30,  1922,  Australasian  wool  supplies 
available  for  the  calendar  year  1922  are  more  than  half 
as  large  as  the  average  annual  amount  available  from  all 
sources  for  the  international  market  during  the  five  years 
1909  to  1913,  and  they  do  not  fall  far  short  of  twice  the 
average  annual  Australasian  exports  for  that  period.  If 
available  supplies  from  sources  other  than  Australasia  are 


WOOL  287 

normal,  and  there  is  no  indication  that  such  is  not  the  case, 
it  is  apparent  that  supplies  for  1922  are  far  in  excess  of  pre- 
war requirements,  and  there  seem  to  be  no  grounds  for  a 
reasonable  expectation  that  demand  from  Europe  will  return 
even  to  the  level  of  1909  to  1913  in  the  immediate  future. 

Superficially,  the  conclusion  might  be  drawn  that  further 
heavy  declines  in  the  price  of  raw  wool  might  be  antici- 
pated. However,  the  situation  as  regards  the  "Bawra" 
wools,  which  constitute  a  large  proportion  of  total  Austra- 
lasian supplies,  is  peculiar.  The  growers  have  been  paid 
for  this  wool  once,  and  the  Association  has  now  paid  the 
last  installment  due  on  the  outstanding  priority  certifi- 
cates which  were  issued  to  growers  in  anticipation  of  the 
sale  of  the  wool.  Under  these  conditions  it  seems  fairly 
certain  that  this  wool  will  never  be  sold  in  a  way  to  de- 
moralize the  market  for  the  current  or  later  clips.  Until 
it  is  ultimately  disposed  of,  however,  it  is  a  powerful 
factor  in  the  international  market.  Another  and  equally 
powerful  factor  is  the  inability  of  consumers  throughout 
the  world  to  pay  high  prices  for  woolen  and  worsted  goods. 

Apparently  disposal  of  the  world's  surplus  of  crossbreds 
still  constitutes  a  problem.  There  is  no  surplus  of  merinos 
but  it  does  not  follow  that  there  is  likelihood  of  a  shortage. 
A  sustained  demand  for  them  at  advancing  prices  is  de- 
pendent on  purchasing  power  adequate  to  maintain  the 
consumption  of  high-priced  wool  fabrics,  and  this  is  not 
assured.  Only  after  the  lapse  of  years  will  the  interna- 
tional wool  market  return  to  a  condition  of  relative  stabil- 
ity such  as  prevailed  prior  to  the  outbreak  of  the  World 
War. 

THE  END 


LD21 


,l0Om-9,'48(B3998l6)476 


M185569 


THE  UNIVERSITY  OF  CALIFORNIA  LIBRARY 


